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Snap Delivers Strong Q2

Snap’s second-quarter confirmed investor hopes that the company is turning things around.

Snap added 13 million new daily users, compared to the 2 million analysts were expecting. It was a 7% improvement from the first quarter and means the company finished the quarter with 203 million daily users, its highest total ever.

Meanwhile, Snap generated $388 million in revenue in the quarter, up 48% from the second quarter last year, and solidly ahead of the range of $335 million to $360 million projected by the company in April.

Snap also revealed that of its 13 million new users, between 7 million and 9 million signed up after it launched a new suite of AR lenses. While Snap didn’t specify it, the company released a gender transformation lens in the quarter which turned into a pop culture phenomenon that helped re-engage lapsed users and bring on some new ones.

In some respects, what Snap pulled off from a DAU perspective is similar to a media company that’s riding the success of a blockbuster movie. The company is projecting between 205 million-207 million users next quarter, which implies more muted growth.

That suggests that barring another surprise hit, the level of success in Q2 was likely a one-off. Still, the company now looks solidly pointed in the right direction and will likely surpass its $17 IPO price in the coming days. What a difference a few quarters makes.

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