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Snapchat built a TikTok competitor, and it already has 100 million users

Snap continues to grow in the double digits, even as social media gets more crowded.

Snapchat built a TikTok competitor, and it already has 100 million users
[Photos: Johan Mouchet/Unsplash]
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TikTok better watch its back.

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It’s been less than three months since Snapchat launched Spotlight, its short-form video platform where creators have the opportunity to get paid, and it already has more than 100 million monthly active users.

That figure was one of many bright spots in Snap Inc.’s fourth-quarter earnings report, posted Thursday after the bell. The company reported revenue of $911 million, up 62%, compared to a consensus estimate cited by CNBC of $857.4 million. Adjusted earnings per share were 9 cents, versus 7 cents expected.

The big story for Snap continues to be its steady user growth—daily active users grew 22% to 265 million—even in the face of growing competition from TikTok, which has further captivated Snap’s target Gen Z demographic in the months since the coronavirus pandemic. Much of that success can be attributed to its Discover platform, on which Snap says “over 90% of the U.S. Gen Z population watched Shows and publisher content in Q4 2020.”

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Discover is also increasingly attracting older users (over 35 in Snapchat world), who spent 30% more time engaging with its shows and content compared to the same period last year, Snap said.

Despite all this rosy news, Snap shares were down almost 10% in after-hours trading after the company warned of challenges ahead. Specifically, it noted that it will be dinged by a pause in advertising that took place in the wake of the January 6 Capitol Hill riots. It also said forthcoming privacy changes from Apple, designed to give users better control over the data that apps collect about them, will likely cause at least a short-term interruption in demand, although Snap said it did not know what the long-term implications of the iOS changes would be.

In warning investors about Apple’s changes and their possible effect on the bottom line, Snap joins fellow social-media giant Facebook, which offered a similar warning in its earnings report last week. Apple has said its changes are in the interest of transparency that benefits users.

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You can check out Snap’s full results here.

About the author

Christopher Zara is a senior staff news editor for Fast Company and obsessed with media, technology, business, culture, and theater. Before coming to FastCo News, he was a deputy editor at International Business Times, a theater critic for Newsweek, and managing editor of Show Business magazine

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