Snap has reported its best revenue and daily active user (DAU) growth rates in more than three years, and delivered its first quarterly cash profit since going public.
The social media company reported revenue growth of 66% year-on-year to US$770 million for the first quarter. Free cash flow improved by US$131 million year-over-year to reach $126 million, marking what Snap says is its first quarter of positive free cash flow as a public company.
DAUs were up 22% year-on-year, or 15 million, to 280 million.
“We began 2021 by achieving our highest year-over-year revenue and daily active user growth rates in over three years during the quarter, and delivering positive free cash flow for the first time in Snap’s history as a public company,” says co-founder and CEO Evan Spiegel.
“The strength of our business underscores our relentless focus on product innovation and is a testament to our team’s ability to execute well together over the long term.”
The company is doubling down on its AR investment, saying that users engaging daily with its AR lenses grew more than 40% year-over-year in the quarter, outpacing its DAU growth by more than 80%.
Snap also says more than 200 million people engage with AR on Snapchat a day, and one of the key verticals it’s tailoring solutions for is apparel and accessories, which is the largest shopping category among US teenagers. According to a study Snap commissioned with Deloitte, 94% of people are expecting to use AR for shopping the same or more in 2022 versus 2021.
Spotlight on Snapchat is also gaining traction, reaching 125 million monthly active users in March. Daily video submissions have increased on the platform by more than 40% from January to March, and the number of viewers watching Spotlight for at least 10 minutes per day grew by over 70%.
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