Snapchat Powers Up to 280 Million Daily Users in Q1, Spotlight Tops 125 Million Monthly Users

Snap, the parent company of Snapchat, beat Wall Street financial estimates for the first quarter — and added 15 million daily users for the app, which exceeded its previous guidance.

Snapchat had an average of 280 daily active users in Q1, up 22% from 235 million in the year-ago quarter (when year-over-year user growth was 20%). Snap had estimated that DAUs would reach 275 million in Q1.

For the month of March, the company said, over 125 million Snapchatters used Spotlight, the user-generated content section that presents videos in a personalized, TikTok-like feed and features a $1 million-plus creator payout pool. Also during the quarter, Snap launched Spotlight in three new countries — India, Mexico and Brazil — making it live in 14 countries.

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Snap’s revenue grew 66% to $770 million in Q1, while adjusted earnings before interest, tax, depreciation and amortization (EBITDA) came in at a loss of $287 million. On a diluted per-share basis, the company said it broke even for the period.

In addition — for the first time as a public company — Snap reported positive free cash flow, which was $126 million in Q1.

“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,” CEO Evan Spiegel said in prepared remarks. “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.”

Snapchat users who submit videos to Spotlight, which debuted last November, are eligible to get a cut of more than $1 million in daily payouts, based on engagement with their content (with a minimum threshold of $250 per user). The company notes that “only a small percentage of creators” will receive payments.

At its first-ever analyst day in February, the company said it expects to achieve revenue increases of at least 50% annually over the next several years, which Spiegel said doesn’t factor in growth assumptions for Snapchat’s user base.

Analysts on average expected Snap to report Q1 revenue of $743 million and an adjusted net loss of 5 cents per share. The company had already lowered expectations: In reporting fourth-quarter 2020 earnings, Snap projected Q1 revenue would be $720 million-$740 million.

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