Snapchat has revealed a few fresh business metrics and hinted at its future at its Investor Day session on Thursday.
The platform reported that the number of monthly active users of its social media program, Snapchat, has risen to over 750 million.
It lags behind the 2.96 billion monthly active users Facebook estimated earlier this month, but the figure surpasses that of rival services like Pinterest, which recently announced it had 450 million monthly users.
Nevertheless, it’s unclear how Snap compares to Twitter, which was acquired by Elon Musk and is no longer a publicly traded corporation.
A separate statistic, called mDAUs, or monetizable monthly active users, was utilized in Twitter’s previous published data before the deal’s closing.
According to Twitter, this was done to show how many users would actually see its advertisements. The figure was lower than Snapchat’s current 375 million daily users, at 237.8 million as of the final public profits in July 2022.
Meanwhile, TikTok reported reaching 1 billion monthly active users in 2021 and was anticipated to reach 1.8 billion by year’s end in 2022.
Moreover, Snap disclosed that 150 million of its 750 million monthly active users were in North America.
In the next two to three years, according to the firm, there is a road to reaching more than 1 billion individuals.
At the event, Snap also teased some of its newest product offerings, such as the 3D Snap Map and the freshly released Communities feature. With the latter, members can add friends and post to a communal Campus Story.
It is geared toward private groups. Colleges and high schools were the initial target markets for the feature, which would eventually spread to other localities.
According to Snap, more than 1,400 universities in the United States currently have access to Communities.
The $3.99/month paid membership Snapchat+, which now has 2.5 million subscribers — a more accurate number than the 2+ million stated during results — was also praised for its success.
Investors naturally want to know how Snap is handling the competitive environment, especially the threat posed by TikTok, how its investments in its ad business will help drive growth, and if it can provide any future guidance. That might happen later today.
Direct response advertising, which makes up around two-thirds of Snap’s business and is expanding more quickly than its brand-oriented business, is the company’s main area of concentration for advertising in the near future, according to Snap.
Its ad revenue compound annual growth rate of almost 50% for the five years ending in 2021 was mostly driven by its DR platform.
It discussed its investments in a range of advertising formats and technologies, including more established ones and more recent ones, like augmented reality (AR), and mentioned that it was aiming to improve the caliber of engagement and conversions.
It added that it was attempting to mitigate the elevated cost-per-action brought on by its adjustments.
Snap stated that as part of its initiatives, it would boost the number of quantifiable conversions through more relevant targeting and machine learning optimizations.
Additionally, it revealed that despite having 300 million monthly active users, TikTok rival Spotlight only draws in less than half of that number.
The business did note that interaction for this product was still increasing.
The amount of time spent viewing Spotlight in the fourth quarter more than quadrupled from the year before, and the number of submissions increased by about 20%.
Throughout the first half of the event, Snap also provided investors with a wide range of additional indicators, including those that had just recently been revealed during earnings.
Since Q4 2020, Snap’s user base outside North America and Europe has increased by more than 80%. Daily new users who have three or more friends have increased by 95% year over year.
Around 90% of Snapchat users who communicate with at least three friends each month continue using the app the next month. On average, Snapchat users share memories with friends 280 million times every day.
Nearly 60% of users who check Snapchat each day create Snaps, while annualized retention for users who have been using it for five years is above 90%. On average, Americans open Snapchat nearly 40 times per day.
88% of users who Snap or talk with a friend create an average of 5 billion Snaps per day, among others.