Snapchat's Growth Resembles Twitter's, Not Facebook's

For the first time since its IPO in March 2017, Snapchat’s parent company Snap delivered quarterly results that left investors pleasantly surprised. Snap reported fourth quarter revenue of $285.7 million, easily beating the $252.8 million that Wall Street analysts had expected. The company achieved 72 percent revenue growth by serving more ads to its users than ever before, increasing the average revenue per user from $1.05 in Q4 2016 to $1.53 in the most recent quarter.

Snapchat’s user growth, always a concern for Snap’s investors, re-accelerated ever so slightly as its daily active user base grew 18 percent year-over-year to 187 million. While it’s good news that the company was able to reverse the deceleration of its user growth, it is still far off the growth rates that Facebook or Instagram saw when they were at a similar stage of development. As our chart illustrates, Snapchat’s user growth looks a lot more like Twitter’s than it does like Facebook’s.

Considering Snapchat’s popularity among teenagers and its lack thereof among older demographics, it’s hard to imagine the platform reaching similar levels of adoption as some of its rivals. Competing with the thriving, Facebook-owned Instagram, which already has more than 500 million daily active users will always be an uphill battle for the self-declared “camera company”.