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Snap increases its daily consumer base and keeps promotional dollars rolling in, including after the pandemic.
The pandemic was not that bad for Snap. The corporation behind Snapchat today reported its second quarter earnings, explaining how the operation progressed through the worldwide epidemic of COVID-19. The customer base has grown by 9 million users a day in the past decade, and its sales has grown by 17 percent year-on-year to $454 million. Snap is positioning growth as a victory, particularly considering that marketers' budgets are dwindling in the middle of a global economic downturn.
"The economic climate has been a problem for many of our advertisement partners and this has had an impact on the growth rate of our company," says Derek Andersen, Snap CFO, in his prepared remarks.
The pandemic has had an evident effect on the company 's profits. Year-over-year growth in January and February was nearly 58 per cent, he notes, before dropping to about 25 per cent in March. He went on to conclude that the fast performance at the beginning of the year indicates that Snap will survive in normal market conditions.
Nevertheless, Andersen admits that the economic outlook is foggy and that Snap's future is likely to depend on how long the pandemic lasts and how marketers tend to increase their budgets.
"We are cautiously hopeful that patterns will change over time if things tend to normalize, but we are also mindful that economic conditions will not change and that some of our advertisement partners will continue to face headwinds created by the crisis," says Andersen.
Customer growth is promising for the product, but also inevitable, considering so many people around the world have been left with home orders. The organization reports people search Snapchat on average more than 30 times a day, and CEO Evan Spiegel states in his prepared remarks that the team has seen an spike in "social events" such as sports, calls and chats.
Snap released five games this quarter and saw average regular play time more than double in the month of March, he says.
Snap is one of the first big media networks to report its second quarter results, but the tale to be watched will continue to remain an advertiser in the middle of the pandemic. Brands, for example, boycotted Facebook's handling of inflammatory messages from President Donald Trump, as well as continuing propaganda concerns. In the meantime, TikTok faces an all-out possible ban in the US. Snap, on the other hand, is just weathering the wind, seeking to pull more people into the fold and keep the advertisers on the boat.
