uploads/2018/08/Snap-ARPU-by-region-1.png

A Silver Lining in Snap’s Gloomy Earnings

By

Updated

Snap’s DAU in North America declined in the second quarter

Another concern for Snap (SNAP) is that, like Facebook (FB), it has lost users in its most valuable market—North America. Snapchat’s DAU in the region declined to 80 million in the second quarter compared to 81 million in the first quarter.

There are three times more Snapchat users in North America than in Europe. North America generated $2.21 per user in the second quarter.

Article continues below advertisement

Snap’s ARPU in the Rest of World is surging

There is a silver lining, however, for Snap. Its ARPU (average revenue per user) outside of North America and Europe grew a robust 65% sequentially to $0.96.

The Rest of World represents Snap’s fastest-growing region in terms of user base. It’s a good sign that the company was able to better monetize a region where purchasing power is lower.

To improve monetization, the company started running six-second unskippable ads in its Shows segment. That could possibly be a big money-maker if applied to its popular Stories segment.

However, as we saw earlier, Facebook and the apps it owns continue to see a surge in users in their respective Stories. The reach of this segment on each of Facebook’s apps would make it difficult for Snapchat’s Stories to compete.

Advertisement

More From Market Realist