Snap Inc. executives said that while the COVID-19 pandemic continues to weigh on many aspects of the business, the virus has driven a surge in augmented reality and entertainment activity on the platform.
The number of Snaps that users created every day during the second quarter grew at double the pace of the company's daily active user growth over the past year, Snap CEO Evan Spiegel said during a July 21 earnings conference call, adding that the number of people using augmented reality tools on the platform has increased 37% in the period compared to a year ago.
"As the changing public health landscape accelerates the adoption of digital products, we believe there is a large opportunity for us to further empower new behaviors with AR, entertainment and commerce," Spiegel said.
Snap's daily active users increased 17% year over year to 238 million in the second quarter.
Snap did not provide specific third-quarter financial guidance due to current uncertainties, but company CFO Derek Andersen estimated year-over-year revenue growth to be 32% through July 19. However, he warned that advertising demand will likely not materialize in the same manner as in previous years, due to a lack of clarity around back-to-school seasons, film releases and sports operations.
"Our best estimate at this point is that our full quarter revenue growth rate is likely to be below our quarter-to-date estimated actual growth rate," he said.
Turning to financials, the Snapchat parent company reported revenue for the quarter ended June 30 of $454.2 million, up from $388.0 million a year earlier. Consensus estimates called for second-quarter revenue of $447.8 million, according to S&P Global Market Intelligence.
Snap's quarterly net loss came to $326 million, or 23 cents per share, compared to a net loss of $255.2 million, or 19 cents per share, in the year-ago period.
The S&P Global Market Intelligence consensus estimate for the just-ended quarter was a loss of 22 cents per share on a GAAP basis, or a loss of 10 cents per share on a normalized basis.
Snap shares were down in after-market speculation as the company's July 21 earnings call came to a close.