Snap’s Q2 financial results are in and the social media platform’s revenue has climbed 19 per cent year-on-year to US $1.6 billion (AUD $2.2 billion), helped by a nine per cent lift in advertising revenue to US $1.28 billion (AUD $1.82 billion).
Evan Spiegel, co-founder and CEO has put this down to “several quarters of improving ad products and a go-to-market approach”.
“We saw better momentum with large advertisers in North America and stronger revenue growth internationally. World Cup-related spending contributed during the quarter, alongside continued strength among small and medium-sized businesses,” he said.
He also added that Smart Campaign Solutions, Snapchat’s AI-powered automation and optimisation tools, have made it easier for advertisers to achieve better outcomes with less manual work.
“AI is transforming Snapchat and the way Snap operates. It powers better recommendations, more automated and performant advertising campaigns, and new creative tools for our community. Internally, it is helping our smaller, more focused team move faster and accomplish more,” he said.
For the advertisers who leverage the app, cost per install declined eight per cent YoY, cost per purchase declined 18 per cent, and app purchase volume increased 128 per cent. Greater adoption by retailers also drove 43 per cent growth in Dynamic Product Ads revenue.
An independent third-party study from Measured also found that, for the brands who utilise the app in its portfolio, Snapchat delivered approximately 19.3 per cent higher incremental return on ad spend than the blended incremental return from its social advertising overall.
Snapchat doesn’t rely on just advertising to bring in funds however. Other revenue surged 85 per cent to US $316 million (AUD $451 million), helped by the premium subscription called Snapchat+, and the features of Memories Storage and Lens+.
The tech platform used by people to send photos, videos and messages to one another now has 971 million monthly active users worldwide and 493 million of those consumers use the app daily. In Australia
Also in Q2 adjusted EBITDA was $250 million (A$357 million), up $208 million (A$297 million) YoY. Free Cash Flow also increased to $121 million (A$173 million), compared to US $24 million (A$34 million) in the prior year.
Looking ahead, Snap is also investing heavily in the future of computing through its new augmented reality glasses, SPECS.
Unveiled in June after more than a decade of development, SPECS are transparent AR glasses designed to integrate AI into everyday tasks. The company explains that unlike current AI-enabled smart glasses or bulkier virtual reality headsets, SPECS are designed to understand the user’s surroundings and provide contextual assistance for work, learning, entertainment and shared experiences without distracting from the real world.
The company believes SPECS is the largest long-term opportunity it currently has. The glasses are set to launch 16 September in Los Angeles.
