Snapchat Reports 229 Million Average Daily Active Users at the End of Q1 2020

The company posted its first-ever quarter with positive operating cash flow

Snap Inc. executives addressed the impact of Covid-19
Photo Illustration: Trent Joaquin; Sources: Snapchat, Getty Images

Snapchat finished the first quarter of 2020 with 229 million average daily active users, up 20% compared with the year-ago period, and the growth was across the board.

Parent company Snap Inc. said in its earnings release that DAUs rose versus both the first quarter of 2019 and the fourth quarter of 2019 in North America, Europe and the rest of the world, and on both iOS and Android, with an average of 4 billion Snaps created each day during the recently concluded period.

Snap Inc.

Chief business officer Jeremi Gorman said in her prepared remarks, “The global outbreak of Covid-19 has dramatically shifted the ways brands are thinking about reaching new audiences. While friends and families are physically separated from each other and their regular routines, Snapchatters are coming together virtually to maintain their friendships through visual communication, self-expression and storytelling.”

Chief financial officer Derek Andersen downplayed the effects of the coronavirus pandemic on Snapchat’s DAU numbers, saying in his prepared remarks, “While we observed higher engagement in the final weeks of the quarter, as many in our community sought to stay connected and entertained from home, this had little impact on our first-quarter result, as we calculate this metric using a daily average.”

On the financial side, Snap Inc. posted its first-ever quarter of positive operating cash flow, tallying $6 million and marking a year-over-year improvement of $72 million.

Revenue was up 44% compared with the first quarter of 2019, to $462 million, and the company lowered its net loss to $306 million from $310 million in the year-ago period.

Adjusted earnings before interest, taxes, debt and amortization saw a $42 million year-over-year improvement, finishing the quarter at negative $81 million.

Co-founder and CEO Evan Spiegel said in his prepared remarks, “While many advertising budgets declined due to Covid-19, we experienced high revenue growth rates in the first two months of the quarter, which offset our lower growth in March. These high growth rates in the beginning of the quarter reflect our investments in our audience, ad products and optimization and give us confidence in our ability to grow revenue over the long term.”

Snap said money committed from advertisers via upfronts doubled in 2020 compared with 2019, adding that direct-response advertising has nearly doubled its share of the company’s total revenue over the past two years, now representing more than one-half of that total.

The company also pointed to its rollouts of return-on-ad-spend bidding and web-based augmented reality lens production tool Lens Web Builder.

Spiegel said, “In the short-term, we are shifting sales resources and pulling forward some investments in direct-response to better serve the advertisers who are trying to reach our audience during this time. For example, we can help movie studios pivot to digital releases by supporting them with a suite of products designed to track titles over a dynamic and flexible release window.”

Gorman added, “We had the opportunity to work closely with Adidas to adapt a new campaign for Snapchat in response to the growing number of stay-at-home orders moving through Europe. With this in mind, Adidas booked a national filter across the U.K. and Germany. They complemented this with audience filters and commercials across other markets to encourage Snapchatters to stay home and to offer them creative, fit and fun ways to stay active during this period. Our team worked quickly with Adidas to help create their #HomeTeam campaign within 24 hours, with the filter being viewed more than 14 million times across the U.K. and Germany. Our large audience, creative formats and advanced measurement tools provide a significant opportunity for brands such as Adidas to reach Snapchatters during these challenging and unprecedented times.”

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