A day after another disappointing earnings report, Snap painted a more detailed picture of its acquisition strategy.
This year, the struggling social network paid $213.3 million for Zenly and $135.2 million for Placed, it revealed in a fresh filing with the SEC. Snap said it was buying the social-mapping startup and the location intelligence and ad-to-store attribution firm in June.
Later in June, Snap unveiled its opt-in Map feature, which lets users track their friends’ whereabouts in real-time.
Snap Map is expected to give publishers and marketers more ways to engage audiences on the platform, which likely spells more money-making opportunities for Snap. In that context, the Zenly and Placed acquisitions make a lot more sense.
For the quarter ended June 30, the “camera company” reported a net loss of 16 cents per share on revenue of $181.7 million.
During the period, Snap added about 7 million users -- fewer than the roughly 8 million it added during the first quarter of the year. Or the 10 million that analysts were anticipating.
In the second quarter, the company also reported lower-than-expected average revenue per user of $1.05.
Despite the disappointing performance, Snap cofounder and CEO Evan Spiegel put on a brave face on Thursday.
“We believe deeply in the long-term success of Snap,” Spiegel told analysts on a conference call -- referring to himself and Snap's cofounder and chief technology officer Robert “Bobby” Murphy. Both promised not to sell any stock.
Critically, Snap still holds considerable sway among its core audience of younger users. Indeed, only 9% of young millennials would currently call Snapchat a “fad,” according to a recent survey conducted by Fluent.
Nearly half (48%) of those 18 to 24 say they are still using Snapchat at least once a month, the marketing firm found. That's on par with both Facebook (49%), and Instagram (46%).
Regarding Facebook's ongoing efforts to undermine Snap, some analysts say the social giant’s market dominance is overblown. Brian White at Drexel Hamilton doesn't buy the “never-ending, doomsday narrative around Facebook's perceived impact on Snapchat.”
The analyst said in a note to investors that he sees “strong upside potential” for Snap and its stock price over the next 12 months.