Snap CEO Evan Spiegel said relaxing the coronavirus blocking would increase engagement on its platform as users increasingly coordinate socialization as the company posted excellent first-quarter results.
Sales at Snap, the parent company of the messaging app Snapchat, rose 66 percent year over year to $ 770 million in the first quarter of last year, exceeding analyst expectations of $ 742 million, it said Thursday. Daily active users reached 280 million, an increase of 22 percent.
“We are optimistic about the engagement trends we see as the world begins to open up,” Spiegel said, adding that when restrictions in the US were relaxed in February, the company saw “tipping points” with users posting a short video clip. “Stories” about their lives and using the Snap Map feature to share their whereabouts and activities.
“More recently, we saw an increase in the number of new friendships and two-way communication on Snapchat in late March as people began to socialize in wider groups,” he added.
The positive set of results benefited from delays in privacy changes in Apple’s iOS 14 operating system, which prohibits app developers from collecting data about iPhone users without their explicit consent in a bomb update expected to hurt the online ad industry .
The changes were supposed to go into effect late last year, but will now arrive next week. Snap, who, according to a report by the The Washington City Times, explored disapproved ways of getting around the rules, said it was “not yet clear” what the longer-term impact of the changes would be.
The company led year-over-year sales growth of between 80 and 85 percent in the second quarter of the year, despite the changes – although coming from a lower base after the pandemic put pressure on Snap’s advertising customers in the second quarter of 2020. .
After a turbulent 2019, Snap has seen a successful turnaround, with investments in product upgrades and offering to advertisers paying off. In March, Spiegel told a conference that a previous multi-year business forecast of at least 50 percent revenue growth was a baseline that was achievable even with continued user growth or engagement.