San Francisco (CNN Business)Snapchat’s resurgence continues, with global lockdowns due to the coronavirus outbreak leading to a spike in usage.
The photo and video sharing app saw a 20% spike in daily active users in the first quarter of 2020 compared to the same period last year, for a total of 229 million users, parent company Snap said Tuesday while announcing its first quarter earnings.
Snap’s (SNAP) stock surged around 20% in after-hours trading.
The company said the coronavirus outbreak has led to increased interaction between Snapchat users in recent weeks.
“Communication with friends increased by over 30% in the last week of March compared to the last week of January, with more than a 50% increase in some of the geographies that were most impacted,” it said.
The company also reported a 44% increase in revenue for the quarter, to $462 million, beating analyst expectations.
Snap’s promising performance comes as the global pandemic causes widespread uncertainty, particularly for the advertising that social networks like Snapchat depend on.
“While many advertising budgets declined due to COVID-19, we experienced high revenue growth rates in the first two months of the quarter which offset our lower growth in March,” CEO Evan Spiegel said during an earnings call Tuesday.
The company is shifting investments and resources to advertisers that are targeting users sheltered in their homes, Spiegel added, “including communication, commerce, entertainment, fitness, and learning” that are increasingly going digital.
Snap has often struggled since its 2017 IPO to compete with rivals like Facebook and Instagram, both of which brazenly copied its most popular features. And new but fast-growing rival TikTok has added to the intense competition.
Snap declined to share revenue or profit guidance for next quarter because of uncertainty around the coronavirus, but said it is expecting its daily active users to rise to approximately 239 million for the quarter.
“The many difficult transitions and changes we made as a business over the past few years have positioned us well for the challenges ahead,” Spiegel said.
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