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Snapchat’s user growth slows in Q1 2018

In the first quarter of 2018, Snap recorded a revenue of USD 230.7 million, up 54 per cent year-over-year driven by growth in Snap Ads, and down 19 per cent sequentially, primarily due to seasonality and the app’s redesign.

Evan Spiegel, CEO, Snap Inc said, “We began 2018 with several major Snapchat updates, and we continue to make progress in growing our advertising business and building tools for advertisers. This quarter, we rolled out the redesign of our application. This new design is driven by our fundamental belief that separating friends from professional content creators is important to both our mission and the long-term growth of our business.”

Over 191 million people use Snapchat daily, up from 166 million in Q1 2017, an increase of 15 per cent year-over-year. However, compared to the last quarter, the daily users only grew by two per cent from 187 million in Q4 2017, the lowest growth ever for Snapchat. The app’s redesign had upset many of its users.

Addressing the concerns, Mr Spiegel said, “A change this big to existing behavior comes with some disruption, especially given the high frequency of daily engagement of our community. We are already starting to see early signs of stabilization among our iOS users as people get used to the changes, but still have a lot of work to do to optimize the new design, especially for our Android users. Our time spent remained more than 30 minutes per day on average following the redesign, and we have also started to realize some of the positive benefits, including increased new user retention for older users.”

Total advertising revenue for Q1 was USD 229 million, showing an increase of 62 per cent year-over-year. Imran Khan, Chief Strategy Officer, said, “In Q1, we learned a lot based on how our users reacted to the redesign. But because of that, we also experienced some short-term disruptions to the business. The rapid pace at which we changed the core product introduced increased volatility into our ads marketplace. While we did not grow as quickly as we wanted, our Snap Ad revenue grew 102 per cent year-over-year, and was down only six per cent sequentially in a seasonally tough quarter.”

Shubhi Tandon

Shubhi Tandon is the Assistant Editor at Digital Market Asia. Fascinated by the evolving digital media industry, she has focussed on tracking developments in the Asia Pacific market since 2014.