Snapchat Adds 15 Million More Users But Sustains Slower Growth In Revenue During Q2

Snap Inc. has officially released its figures for Q2 and despite showing an increase in its userbase, the company was only able to achieve a slow growth in revenue.

The news does not come as a major surprise as the platform mentioned in May that the current market conditions would also be impacting the brand and that can clearly be seen on the revenue side of things.

For starters, the company delineated in its report the addition of nearly 15 million users, which increased its daily active users to a staggering figure of 347 million.

However, one concerning point in this regard was related to how the firm received zero growth as far as its holding in the North American market was concerned. And in case you didn’t know, this happens to be the company’s biggest source of revenue.

When looking at the other markets that it was able to target, the average revenue stood at a new low, despite the app adding a plethora of new users from this location.

Another striking point in the report highlighted how there was a major increase in the number of users hailing from the Indian market, where the IT sector and relative connectivity continues to flourish, assisting apps in expanding their presence.

While this is definitely welcomed by the company, it clearly does not make a significant difference in terms of revenue-boosting power for the moment. And that’s especially true because had the US and Canadian markets been involved, the impact would have been much more powerful.

The decline observed in the American and European markets must be highlighted as such stagnation could really turn out to be a mega concern for so many investors. With this news does come some information about the company planning for the future and how it wishes to present a new set of expansion details.

Snap says that in order to better reach its audience, it is focusing on the expansion of its reach in several different regions of the world and that it feels serves as a key proposition.

Additionally, the firm hopes to better its purchase activities while stressing other factors like reaching milestones. And it’s definitely important because the revenue results for Q2 are definitely altered by a huge shift in conditions of the market.

We’re not saying the revenue for the app didn't grow. In fact, it did reach a figure of $1.1 billion, however, the rate of growth should have been better as per the company’s expectations.

Snap mentioned in its Q2 report how revenue growth fell backward by a mighty 25% point QoQ. It continued to shift back as the quarter progressed. This was seen in regard to advertising and also as a direct answer for its businesses.

Another statement was issued by the company that could be seen as a tactic to provide reassurance to investors regarding how Snap Inc. takes these findings very importantly and hence will be working on addressing such concerns in the future.

The company is planning to focus more on its community growth projects so that it gets the returns that it deserves regarding its advertising expenditure.

We are definitely not sure if that would even change things but it’s definitely sending out a clear message to the world that it’s altering its systems and trying to build on ways that maximize revenue.

But that’s where audience growth comes into play. If Snap Inc. fails to expand its reach, it’s definitely going to have to pay a hefty price.

As many would be aware, it’s a market leader in terms of AR technology and is definitely competing with other tech giants. But whether or not it can sustain growth and new developments, only time can tell.

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