Share prices for Snapchat’s corporate parent Snap Inc. shot up as much as 13% in after-hours trading Tuesday on news that Snapchat added 13 million daily active users in Q2 of 2019. The service ended the quarter with 203 million users, compared to 190 million at the end of Q1, and 188 million in Q2 of 2018.
Snap executives called out its AR camera lenses as a key growth factor, estimating that between 7 and 9 million of those 13 million users were attributable to its new AR lenses. Altogether, Snap lenses had seen more engagement in Q2 of 2019 than in all of 2018. “Augmented reality has become a daily behavior for the vast majority of our community,” said Snap CEO Evan Spiegel.
Snapchat also pointed to its rebuilt Android app as another growth contributor. “We saw more than a 10% increase in the retention rate of people who open Snapchat for the first time,” the company said in its earnings release.
Snap revealed the notable user growth as part of its Q2 2019 earnings results, which also included better-than-expected monetary benchmarks, despite the fact that the company continues to lose money.
Snapchat managed to grow its revenue to $388 million for the quarter, compared to $262 million during the same quarter last year. Losses declined to $255 million, compared to $353 million in Q2 of 2018. That equals non-diluted losses of $0.06 per share.
Analysts had expected losses of $0.10 per share on revenue of $360.32 million.
Snap also reported solid growth for Discover, its monetized content platform. Daily watch time on Discover increased by over 60% year-over-year, while the number of daily viewers grew by 35% percent year-over-year. “By investing in premium content, we are seeing the quality of our content platform improve in addition to increasing engagement with longer-form content,” Spiegel said.
This marks the second solid recovery quarter for Snap, which managed to grow its user base by 4 million in Q1. On Tuesday, the company forecast revenue of between $410 million and $435 million for Q3 of 2019.