Snap had some good news today for investors in its Q4 2018 earnings report: It’s no longer losing daily active users, and it generated more revenue last quarter than Wall Street had expected.
The ephemeral camera company reported 186 million DAUs, the same amount as it did last quarter. Snap had lost DAUs for the past two quarters, and at its peak in Q1 2018 reported 191 million DAUs.
Revenue was nearly $390 million, up 36 percent year-over-year. That beat Wall Street’s expectations of about $378 million. Snap is still losing money, and lost about $192 million last quarter.
“In 2018, we focused on building a foundation to scale the business over the long-term by driving sustainable product innovation, scaling our advertising platform, and hiring the leadership team that will help us achieve our future goals,” CEO Evan Spiegel said in a statement. “We ended the year with user engagement stabilizing and have started rolling out the new version of our Android application to a small percentage of our community. We are substantially closer to achieving profitability, as we have maintained a relatively flat cost structure across the past five quarters while growing full-year revenue 43 percent year-over-year.”
In a press release, Snap also said that the early test results of its new Android app “are promising, especially on less performant devices, including a 20 percent reduction in the average time it takes to open Snapchat.” Analysts believe that Snap needs a better-performing Android app if it wants to add more users in developing countries. As of Q4 2018, nearly 75 percent of Snap’s DAUs come from North America or Europe. However, the company did say today that it is making progress in diversifying the geographic sources of its revenue. The percentage of Snap’s revenue that comes from users outside of North America is now 31 percent, up from 23 percent during the same period last year.
On its earnings call, Snap’s chief business officer Jeremi Gorman said the company estimated that there are 2 billion Android users who are not currently using Snapchat, and “if we can take a few percent market share it would make a real difference for our user base.”