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A Look at Snap’s Snapchat Audience Trends

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Feb. 28 2018, Updated 10:31 a.m. ET

Daily audience increased more than 18% YoY

Snap’s (SNAP) Snapchat app (application) continued to increase its daily audience in 4Q17. It defied escalating competition from Facebook’s (FB) Instagram and WhatsApp.

There were 187 million daily active users (or DAUs) on Snapchat at the end of 4Q17, indicating an increase of 18.4% YoY (year-over-year). Facebook’s DAUs increased 14.2% YoY in 4Q17, while Twitter’s (TWTR) increased 12% YoY in the same period.

Snapchat gained more DAUs in 4Q17 than Wall Street expected. Analysts on average were expecting Snapchat to close the quarter with 184.2 million DAUs, but it closed the quarter with 187 million.

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App redesign boosting user retention

The growth in Snapchat’s audience in 4Q17 was supported by investments Snap made to improve its photo-sharing app. It began redesigning the app last year. Those efforts seem to be encouraging more use of the app and drawing new users. Tweaking the Snapchat app for Android, for example, drew more users to the app and helped boost user retention, which rose 20% YoY.

The improvement in Android user retention means that “the people who try Snapchat on Android are much more likely to stick around and become Daily Active Users,” said Evan Spiegel, Snap’s chief executive officer, during the conference call to discuss the company’s 4Q17 performance.

Why Android matters

Android, a product of Alphabet’s (GOOGL) Google, is the dominant mobile operating system (or OS) in the world. According to StatCounter, Android’s share of the worldwide mobile OS was 74.4% at the end of January 2018, compared with 19.6% for Apple’s iOS and 0.61% for Microsoft’s (MSFT) Windows.

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