As part of its Q1 2024 earnings release, Snap revealed that total watch time on TikTok competitor Spotlight grew more than 125% year-over-year. Snapchat launched the TikTok-like stream in late 2020 as a way to compete with TikTok’s growing popularity. The company is heralding the success of the short video stream a day after President Biden signed a bill that would ban TikTok if its Chinese parent company, ByteDance, doesn’t sell it within a year.
Snap says total watch time for content globally increased year-over-year, driven primarily by an increase in total watch time for Spotlight and Creator Stories. The company says it has built more advanced ranking models over the past year that lead to 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 investing in productive AI models to create 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 rose 21% to $1.195 million, marking a return to double-digit growth. Inside letter to investors, Snap attributes the growth to improvements it made to its advertising platform, along with increased demand for its direct response (DR) advertising solutions. The company says the number of small and medium-sized advertisers on Snapchat grew by 85% year-over-year.
Shares of Snap jumped 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 “increase modestly as we move towards 2024”.
Snap’s earnings announcement comes a day after Meta reported 27% growth for the first quarter. However, Meta shares took a dive on weak revenue guidance and plans to invest “aggressively” in artificial intelligence.
