Snap has not been exempt from the havoc COVID-19 has wreaked on the economy. However, the company’s first quarter earnings report on Tuesday proved that it might weather the storm just fine.
Snap reported that in the first quarter of 2020, its Daily Active Users (DAUs) reached 229 million, a 20% increase compared to Q1 of 2019. The way people are using the platform has also grown: time spent on Discover has increased 35% in the last year, and people created more than 4 billion snaps each day on average (in 2018, that number was 3 billion).
While Snapchat attributes those numbers, as well as positive statistics about revenue and cash flow to investments in product development, distribution partnerships, and more, Snapchat also said that it has seen increased use numbers in the timeframe and areas most affected by coronavirus. It reported that “communication with friends increased by over 30% in the last week of March compared to the last week of January, with more than a 50% increase in some of the geographies that were most impacted.”
“We are grateful for the opportunity to serve our community and partners during this difficult time,” Evan Spiegel, Snap’s CEO, said in the company’s statement. “Snapchat is helping people stay close to their friends and family while they are separated physically, and I am proud of our team for overcoming the many challenges of working from home during this time while we continue to grow our business and support those who are impacted by COVID-19.”
Over the past year, Snapchat has been rebuilding positivity around the business (and its finances) since its controversial redesign and competition from Instagram tanked users, and its stock price, in the years after its 2016 IPO. It has seen tempered but steady growth worldwide. This quarter, it even exceeded the market’s expectations. Predictions that Snap’s emphasis on curated information (over Facebook and Twitter-style free-for-alls), advertiser appeal, and just the fact that it’s regularly churning out content during a time when people want to watch things more than ever, may be coming true.
Still, Q1 earnings might not reflect the full toll coronavirus has taken on Snap and the economy as a whole. The earnings slideshow concludes: “Given uncertainties related to the ongoing COVID-19 pandemic and the rapidly shifting macro conditions, we are not providing our expectations for revenue or Adjusted EBITDA for the second quarter of 2020.”