As part of its Q1 2024 earning release, Snap revealed that total watch time on its TikTok competitor, Spotlight, increased more than 125% year-over-year. Snapchat launched the TikTok-like feed in late 2020 as a way to compete with the rising popularity of TikTok. The company is touting the success of its short-from video feed a day after President Biden signed a bill that would ban TikTok if its Chinese parent company, ByteDance, fails to sell it within a year.
Snap says overall time spent watching content globally grew year-over-year, driven primarily by increases in total time spent watching Spotlight and creator Stories. The company says it has built more advanced ranking models over the past year that are driving improvements in content engagement.
The app had 422 million daily active users in Q1 2024, an increase of 39 million, or 10% year-over-year. Snapchat+ subscribers also more than tripled year-over-year, surpassing 9 million subscribers in the quarter.
Snap plans to continue to invest in generative AI models for the creation of Lenses on the platform, noting that the number of ML and AI Lenses viewed by users increased by more than 50% year-over-year.
The company’s revenue for the quarter increased 21% to $1.195 million, marking a return to double-digit growth. In its letter to investors, Snap attributes the growth to improvements that it made to its advertising platform, along with an increase in demand for its direct-response (DR) advertising solutions. The company says the number of small and medium-sized advertisers on Snapchat increased 85% year-over-year.
Snap shares rose more than 26% in extended trading on Thursday.
The company, which laid off 10% of its workforce in February, now says it expects headcount to “grow modestly as we move through 2024.”
Snap’s earnings release comes a day after Meta reported 27% growth for its first quarter. However, Meta’s shares plunged on weak revenue guidance and plans to invest “aggressively” in AI.
