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Snap snares new users with revamped Android app

Snapchat now has 203 million daily active users.

snapchat-comparison-2

Snap reported second-quarter earnings on Tuesday. 

Angela Lang/CNET

Snap, the parent company of ephemeral-messaging app Snapchat, said Tuesday that its daily active user base grew 7% to 203 million in the second quarter, suggesting the company was seeing success with its revamped Android app. That's an increase of 13 million from the 190 daily active users the company reported in the first quarter.

Snap CEO Evan Spiegel during a call with analysts said that new Snapchat Lenses, an augmented reality feature that allows people to distort their faces, helped to fuel user growth. One popular filter that Snapchat released this year allowed users to change their gender in photos.  

"The popularity of these Lenses drew millions of people into our rebuilt Android application, where they experienced the new and improved Snapchat that led to increased engagement," Spiegel said. The growth in users is the biggest gain the company has had since the second quarter of 2016, he said.

Snap has been grappling with challenges, including executive turnover, and was experiencing consecutive drops in daily active users. Growth has returned this year, though Snap's user base is still smaller than those of competitors such as Facebook, Instagram, TikTok and Twitter. In April, the company updated Snapchat's Android app with a revamped camera and fewer bugs. The company also released new games and original shows on Snapchat in an effort to keep users on the platform longer. 

"Now the challenge is to convince those newly added users to stick around and continue to use Snapchat on an ongoing basis," Debra Aho Williamson, an analyst with eMarketer, said in a statement. "As long as it continues to roll out compelling new features, they will do that."

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Snap saw a 10% increase in the retention rate of people who opened the ephemeral-messaging app for the first time after it revamped its Android version, the company said. Most of its growth in daily active users came from outside of North America and Europe, data from Snap shows. 

Snap reported $388 million in revenue in the second quarter, which was well above the $359.7 million that analysts surveyed by Thomson Reuters expected.

The company posted a loss of 6 cents per share, beating expectations of a loss of 10 cents per share. Snap's net loss narrowed to $255 million from $353.1 million during the same period last year.

The company's stock is up more than 11 percent to $16.54 per share in after-hours trading. 

Originally published July 23, 1:36 p.m. PT
Update, 1:46 p.m. PT: Adds more details about Snap's user growth
Update, 2:33 p.m. PT: Adds remarks from earnings call and from an analyst
Update, 2:57 p.m. PT: Adds information about popular Snapchat filter