Snap Growth Soars Amid TikTok's Ban in US

Snap Inc. reported a strong first quarter with revenue surging 21 percent year-over-year to $1.195 billion, marking a return to double-digit growth. 

According to TechCrunch's report, the company attributes this growth to improvements in its advertising platform and a surge in demand for its direct-response advertising solutions. 

The news comes a day after President Biden signed a bill potentially banning TikTok if its Chinese parent company fails to sell it within a year. 

Snap's user base is also growing steadily, with daily active users reaching 422 million in Q1 2024, an increase of 10 percent year-over-year.

The company's short-form video platform, Spotlight, a direct competitor to TikTok, saw a massive boost with watch time increasing over 125% year-over-year. Snap is crediting its advanced ranking models for driving user engagement with content across the platform. 

Another bright spot for Snap is its Snapchat+ subscription service, which more than tripled its subscriber base year-over-year, surpassing 9 million subscribers in Q1. 

The company plans to continue investing heavily in artificial intelligence, particularly generative AI models for creating Lenses, a popular feature on the platform. 

They reported a significant increase in the number of AI-powered Lenses viewed by users. 

Snap also announced a shift in its workforce strategy. After laying off 10% of its employees in February, the company now expects to see "modest growth" in headcount throughout 2024. 

This positive earnings report comes on the heels of Meta's first-quarter results, which saw 27% growth. However, Meta's stock price dropped due to weak revenue guidance and ambitious plans for further investment in AI. 

Snap's strong performance, coupled with the potential removal of a major competitor, has investors optimistic about the company's future. The company's stock price rose over 26 percent in extended trading on Thursday.