The pandemic hasn’t been too bad for Snap. The company behind Snapchat today announced its second quarter results, detailing how its business fared during the COVID-19 outbreak around the world. Its user base is up 9 million people per day in the last quarter and its revenue is up 17% year-over-year to $ 454 million. Snap positions growth as a victory, especially as advertiser budgets shrink amid a global economic downturn.
“The economic environment has become difficult for many of our advertising partners and this has had an impact on the growth rate of our business,” said Derek Andersen, Chief Financial Officer of Snap, in prepared remarks. The pandemic has had a clear impact on the company’s operations. Year-over-year growth in January and February was around 58%, he says, before declining to around 25% in March. He added that the strong growth at the start of the year suggested that under normal market conditions Snap could thrive.
Still, Andersen acknowledges that economic forecasts are blurry for the future and that Snap’s success will likely depend on how long the pandemic lasts and whether advertisers continue to tighten their budgets.
“We are cautiously optimistic that trends may improve over time if conditions start to normalize, but we are also aware that economic conditions may not improve and some of our advertising partners may continue to face the headwinds caused by the crisis, ”says Andersen.
The growth in user numbers is encouraging for the business, but also predictable given that many people around the world have been stranded indoors with home orders. The company claims that users check Snapchat on average more than 30 times a day, and CEO Evan Spiegel says in his prepared remarks that the team has seen an increase in “group activities,” such as games, calls and chats. cats. Snap launched five games this quarter and saw the average daily time spent in games more than doubling in March, he says.
Snap is one of the first major social platforms to announce its second quarter results, but the story to follow will continue to be the fallout from advertisers amid the pandemic. Brands have, for example, boycotted Facebook over its handling of President Donald Trump’s inflammatory messages, as well as persistent misinformation issues. Meanwhile, TikTok faces a potential total ban in the United States. Snap, for its part, is only weathering the storm, trying to get more users into the fold and keep advertisers on deck.