Home Platforms Snap Q2 Surprises As Users Embrace AR

Snap Q2 Surprises As Users Embrace AR

SHARE:

Turns out people really like those Snapchat baby face and gender swap filters.

The app’s daily active users hit 203 million in Q2, up 8% year over year, and revenue was far better than expected at $388 million, a 48% increase from this time last year, according to the company’s Q2 earnings disclosure.

This is the second good quarter for Snap in a row after a string of less-than-stellar reports. Last quarter, daily active users (DAUs) increased by 8.9 million (5%), but the year before, user growth had lagged.

The DAU jump in Q2 is thanks, at least in part, to Snap’s investment in augmented reality. The company estimates that somewhere between 7 million and 9 million of its new users came to the platform to mess around with its face filters.

More than 200 million people played with the filters, which can be used to change a person’s appearance in real time, within the first two weeks after launch. And Snap saw more engagement with augmented reality lenses created by its users in Q2 than in the entirety of 2018, CEO Evan Spiegel told investors.

Investment in AR “not only brought in some new users to the platform, but increased engagement with existing users,” said CFO Derek Andersen.

With more users on the platform, engagement on the upswing and the redesign of its Android app under its belt, the focus now is to attract more advertisers to Snapchat.

The “single biggest driver” for Snap’s revenue in the short-to-medium term will be increasing the number of active advertisers using the app, said Jeremi Gorman, Snap’s chief business officer.

“We have significant headroom in our business given the high levels of user engagement and ample supply of available impressions,” she said.

The top three priorities for the foreseeable future from a monetization perspective, Gorman said, will be to keep rolling out new creative ad formats that are easy to use to attract more small- and medium-sized businesses; to prove ROI and optimize for whatever outcomes advertisers are looking for; and to align the Snap sales team around advertiser needs and objectives.

Snap declined to share how many advertisers are spending on the platform right now other than to say that the overall number of advertisers is growing across both brand and performance, as is spend per advertiser, which “bodes well for the long term,” Andersen said.

Subscribe

AdExchanger Daily

Get our editors’ roundup delivered to your inbox every weekday.

But although Snapchat’s average revenue per user for the quarter also showed an impressive increase – up 37% year over year to $1.91 – ARPU is still way less than Facebook, Instagram and Twitter.

And there was no word on Snapchat’s planned ad network. Snap said in April that it’s planning to launch an audience extension product called Audience Network. The beta likely won’t open until sometime this summer.

Must Read

CleanTap Says It Easily Fooled Programmatic Tech With Spoofed CTV Devices

CleanTap claims that 100% of the invalid traffic it spoofed was accepted into live auctions run by programmatic platforms and was successfully bid on by advertisers.

HUMAN Expands Its IVT Detection Tool Kit With A New Product For Advertisers, Not Platforms

HUMAN has recently started complementing its bid request analysis by analyzing the time between when a bot clicks an ad and when the landing page loads. Now it’s offering the solution to individual advertisers.

Index Exchange Launches A Data Marketplace For Sell-Side Curation

Through Index Exchange’s data vendor marketplace, curators gain access to third-party data sets without needing their own integrations.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters

Can Publishers Trust The Trade Desk’s New Wrapper?

TTD says OpenAds is not just a reaction to Prebid’s TID change, but a new model for fairer, more transparent ad auctions. So what does the DSP need to do to get publishers to adopt its new auction wrapper?

Scott Spencer’s New Startup Wants To Help Users Monetize Their Online Advertising Data

What happens when an ad tech developer partners with a cybersecurity expert to start a new company? You end up with a consumer product that is both a privacy software service and a programmatic advertising ID.

Former FTC commissioner Alvaro Bedoya speaks to AdExchanger Managing Editor Allison Schiff at Programmatic IO NY 2025.

Advertisers Probably Shouldn’t Target Teens At All, Cautions Former FTC Commissioner

Alvaro Bedoya shared his qualms with digital advertising’s more controversial targeting tactics and how kids use gen AI and social media.