Snapchat’s parent company reported user growth of 7 million daily active users during the third quarter of the year, a sign that it is continuing its turnaround after a tough 2018.
Snap Inc., which owns the messaging app, now has 210 million total daily active users, up from 203 million at the end of the previous quarter. Analysts were expecting the company to add around 3 million subscribers during the period. Snap had 186 million users in the year-ago third quarter.
Meanwhile, the company brought in $446 million in revenue for the quarter, up 50 percent from the year-ago period, and had a loss of 16 cents per share. Wall Street was looking for $435 million in revenue and an adjusted loss of 19 cents per share during the latest quarter.
Shares in Snap rose 2 percent in after-hours trading to $14.28 after CEO Evan Spiegel in a statement pointed to a “clear path to profitability” after the company added daily active users during the latest quarter faster than expected.
The company also pointed to increased user engagement as Snap pointed to total daily time spent watching the Discover platform rising 40 percent year-over-year. And during the latest quarter, Snap said over 100 Discover channels reached a monthly audience of over 10 million viewers.
“As Snapchat’s reach has grown over the years, so has the frequency with which people use our service. Today, each daily active user opens Snapchat 30 times per day on average,” Spiegel told analysts during a conference call Tuesday after the release of the company’s third-quarter results.
The exec added Snap was boosting user engagement by including new features, including games, within the messaging app. “The value we provide to our community has helped us reach 210 million daily active users and enabled us to expand our business by building a mobile content platform, an augmented reality platform, a social map, and most recently, a new gaming platform,” Spiegel insisted.
He also argued Snap stood to gain from 2019 being the first year that time spent on mobile surpassed TV viewing in the U.S. market, signaling a sea change in content viewing habits. “We believe that this shift in behavior towards mobile content has created a large opportunity for our business, and we are excited about investing more to scale our content platform,” Spiegel said.
Snap has been on the rebound in 2019, adding 13 million users during the second quarter after an Android redesign that Spiegel attributed in part to the recent growth. The company is up more than 150 percent since the beginning of the year.