yesSofie KodnerNone

Get access to Protocol

I’ve already subscribed

Will be used in accordance with our Privacy Policy


Snap earnings: Users and revenue surge

Snap earnings: Users and revenue surge
  • Q1 revenue: $462 million (+44% YoY, -18% QoQ, vs. $431 million expected)
  • Q1 losses: -$305.9 million (-1.44% YoY, 27% QoQ) net
  • Q2 guidance: Snap is one of many companies not providing expectations for revenue for the second quarter of 2020.

The big number: Daily active users increased 20% year-over-year to 229 million, up by 11 million users and 5% from last quarter. That's the highest year-to-year growth in users since the second quarter of 2017. Thanks are owed in part to coronavirus. Investors liked the numbers, driving Snap shares up more than 20% in after-hours trading.

People are talking: "Our product has never been more important in people's lives, especially for helping close friends and family stay together emotionally while they are separated physically," said co-founder and CEO Evan Spiegel. "We are seeing sustained communication volumes on our service that eclipse the peaks we see during major holidays."

Opportunities: Snap's investment in premium content and augmented reality has resonated with users. Over 75% of daily active users engage with AR every day on average, and more than half of the Gen Z population in the U.S. watches news content on Discover. "We were pleased to see that the total time spent with Discover content grew by more than 35% year-over-year," CFO Derek Andersen said. "Time spent with Shows, which includes scripted and unscripted series as well as daily news shows, more than doubled year-over-year in Q1."

The company also launched App Stories in late March. The feature allows users to share Stories on third-party apps.

Threats: Ad revenue per unit was down from $2.58 in Q4 2019 to $2.02 in Q1 2020. "The economic environment has become challenging for many of our advertising partners and this has had an impact on the rate of growth in our business," Andersen said. At the same time, operating expenses were $298 million in Q1, up 20% year-over-year.

The power struggle: Snap competes with companies like Twitter, Pinterest, Facebook and Google for ad money — the company's only source of revenue. The company seems to be faring well, for now: "While many advertising budgets declined due to COVID-19," Spiegel said. "We experienced high revenue growth rates in the first two months of the quarter, which offset our lower growth in March."

Martin Cooper with his original DynaTAC cell phone.

Photo: Ted Soqui/Getty Images

Martin Cooper helped invent one of the most consequential and successful products in history: the cell phone. And almost five decades after he made the first public cell phone call, on a 2-pound brick of a device called the DynaTAC, he's written a book about his career called "Cutting the Cord: The Cell Phone Has Transformed Humanity." In it he tells the story of the cell phone's invention, and looks at how it has changed the world and will continue to do so.

Cooper came on the Source Code Podcast to talk about his time at Motorola, the process of designing the first-ever cell phone, whether today's tech giants are monopolies and why he's bullish on the future of AI.

Keep Reading Show less
David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Latest Stories