Snap has reported a loss of $443m (£341m) in its second-ever financial results, for Q2 2017 (the three months ended 30 June).
That’s compared to a loss of $115.9m a year earlier, and $2.2bn in Q1 2017 – though this latter figure was inflated by stock-based compensation expenses of $2bn.
Revenue, however, is on the up – $181.7m for Q2, up 153 per cent year-on-year, and 21.4 per cent on the previous quarter.
That’s driven by a rise in daily active users, up four per cent quarter-on-quarter to 143m, with a quarter of smartphone users in the US, UK and France now using Snapchat every day, according to CEO Evan Spiegel. Time spent in the app was also up, to “over 40 minutes” for under-25s and “over 20 minutes” for over-25s.
Snap also made more money out of those users, with ARPU (Average Revenue Per User) up 16 per cent. At $1.05, however, it still lags behind competitors. By comparison, Facebook last month reported an ARPU of $4.57 – though it does have multiple services where it can monetise users.
On the company’s earnings call, Spiegel discussed the current state of Snap's ad offering . “Over 60 per cent of Snap ads were purchased through our auction, which is more than double last quarter and we believe overall that the transition to a bidded auction is the best way to grow our business over the long term,” he said.
“I think lower pricing is an important driver of growth at this stage, especially in the short term because it provides an incentive for advertisers to get over the hurdle of having to learn how to use Snap. And given the dynamics that we're seeing in the industry in the marketplace, where mobile ad pricing seems to be increasing pretty quickly due to limited impressions, we think that this offering of lower prices and high engagement is really attractive to advertisers.”