Snap Shares Soar on Upbeat Earnings
Tami Abdollah is dot.LA's senior technology reporter. She was previously a national security and cybersecurity reporter for The Associated Press in Washington, D.C. She's been a reporter for the AP in Los Angeles, the Los Angeles Times and for L.A.'s NPR affiliate KPCC. Abdollah spent nearly a year in Iraq as a U.S. government contractor. A native Angeleno, she's traveled the world on $5 a day, taught trad climbing safety classes and is an avid mountaineer. Follow her on Twitter.
Snap shares soared after CEO Evan Spiegel touted the company's highest Q3 growth rate since 2017. The outspoken executive used Tuesday's earnings call to highlight the social media platform's efforts to engage users "following the murders of George Floyd, Ahmaud Arbery and Breonna Taylor."
The upbeat earnings report sent its stock soaring 20% in after-hours trading.
The Santa Monica-based social media and camera company beat earnings expectations with revenue up 52% year over year in Q3 to $679 million. The company, which is still not profitable, trimmed losses this quarter to $200 million from $227 million the previous year.
With more people stuck at home during the pandemic, Snap saw daily active users grow 18% year-over-year to 249 million. The average number of Snaps created daily grew 25% in that time.
"Over the past year, as the changing public health landscape accelerates the adoption of digital products, we believe there is a large opportunity for us to further empower new behaviors, with AR, entertainment and commerce," Spiegel said.
Spiegel has not been afraid to wade into discussions around systemic racism, calling for tax reform and reparations over the summer in a lengthy memo to employees. On Tuesday, he said that the company responded to the summer protests over the deaths of Floyd, Arbery and Taylor, by publishing curated community stories "featuring powerful Snaps from our community, which ranged from breaking news about peaceful protests, to a dialogue about what it means to be living while Black in America."
He added the company is also providing a dedicated breaking news section for media partners like NBC News and ESPN.
Snap's chief financial officer, Derek Andersen, tempered expectations leading into Q4. While Q4 advertising demand has historically been bolstered by the holiday season, it's unclear if that will materialize this year, Andersen cautioned in prepared remarks. He said the company is also expecting year-over-year expense growth to be likely higher in Q4 than to date due to efforts to "double down" on existing momentum.
Snap had seen its stock rise significantly over the summer as the Trump administration zeroed in on competitor TikTok and threatened a ban on the China-owned viral-video company over national security concerns. Snap also launched its own TikTok rival, "Sounds on Snapchat," earlier this month, which lets users add music to their Snaps.
Snap also may have benefited from a boycott by major advertisers, which reduced ad spending by millions over the summer.
Spiegel acknowledged during Tuesday's earnings call that "the growing focus on brand safety and privacy, across the entire industry, places us in a unique position of strength, as we have invested in these areas from the beginning of our business."
"Snap's Q3 earnings results yet again confirm that 2020 is a good year for the platform," said digital marketing company Socialbakers' CEO Yuval Ben-Itzhak, who added that Snap's earnings reflect the fact that worldwide social media ad spend increased in Q3 by 56.4%.
Ben-Itzhak noted that mobile is also emerging as the first screen for users and user-generated content, which has fueled Snapchat's growth from the get go. New features like City Painter and Sounds, have shown its ability to innovate to be "a clear challenger to TikTok and Instagram Reels."
The company has added more than 180 new Discover channels in Q3, including those by Disney, ESPN, NBC, Viacom, CBS, the NBA and the NFL. It also grabbed onto 90s nostalgia among the over-30s crowd, holding a "Fresh Prince of Bel Air" cast reunion that was watched by more than 35 million.
"With people spending more time online as a result of the pandemic, Snapchat's premium content has proven to be a favorite with users and marketers alike," Ben-Itzhak said.
But marketing analytics firm eMarketer Principal Analyst Debra Aho Williamson said nearly all of Snap's gains come from outside of North America and Europe, and noted its otherwise "lackluster growth" is "not completely surprising" as the increase in users from an early "pandemic bump" abated and growth of new social media users have slowed.
Williamson attributed Snap's "outperformance" to its "rising stature as a direct-response advertising platform" as well as its unique offerings in AR and video advertising. The company has also benefited from an overall increase in ecommerce-related ad spending in digital media during the pandemic, Williamson said.
Spiegel said the adoption of augmented reality, which the company has heavily invested in, is happening "faster than we had previously anticipated."
The company said users created more than 1.5 million "Lenses" in Q3 as part of the platform's "Lens Studio," which allows users to create and share augmented reality lenses. Spiegel said Snapchatters play with Lenses six-times as often as they did last year.
Snap's AR overlays and machine learning capacity has, he said, let luxury brand Gucci leverage its tracking technology to "help people try on their latest sneakers and Snapchat and even buy them directly within the Lens." Spiegel noted that gaming and ecommerce companies in particular have "leaned in" as advertisers on the platform.
Snapchat is becoming increasingly popular among key-audience, Gen Z. Piper Sandler's fall 2020 survey ranked Snapchat as Gen Z's favorite social media platform while Instagram fell from No. 2 to No. 3 and TikTok moved up to No. 2. More than half of the U.S. Gen Z's population watched COVID-related news created by Snap's partners, Spiegel said.
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LA Tech Updates: Apple Podcast Vet Joins QCODE, Amazon Reportedly in Talks to Buy Wondery, Pharrell's New Black Ambition Incubator
Apple Podcast Veteran Joins Startup QCODE<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDUzNTQzMC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYzNDUzMzYyNH0.pOGV2lL0qOJQDiWw1T5i4SqsGfaL54hLWED6_5Mf1Ww/img.png?width=980" id="8d68d" class="rm-shortcode" data-rm-shortcode-id="f2a47797239f360473fead53338231d4" data-rm-shortcode-name="rebelmouse-image" alt="qcode" />www.sonos.com <p>QCODE, a Los Angeles podcast startup run by a former Creative Artists Agency talent agent, snagged longtime Apple podcast executive Steve Wilson. The 15-year veteran will become QCODE's chief strategy officer.</p> <p>QCODE, which <a href="https://dot.la/sonos-podcast-qcode-2648395035.html" target="_self">last month raised $6.4 million</a> in a Series A round led by Sono, is positioning itself as a funnel for Hollywood. </p> <p>Founded by Rob Herting, a former agent who had represented largely writers and filmmakers, the company has produced eight shows since 2019. Several have been auctioned for film and television, including "Dirty Diana." Amazon picked up the 6-part erotic drama for a TV series.</p>Wilson, who most recently ran marketing for Apple Podcasts, brings insights from the behemoth platform as the industry sees revenues soar. Advertising brought in near $1 billion this year, according to Interactive Advertising Bureau's podcast report prepared by PwC.
Amazon Reportedly in Exclusive Talks to Buy Wondery<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDc5NDU5OS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0MjgyMDY3NX0.BHKSXjwra-gGsFEa7lXCCCMJXWV5cYxrZqhddj3-uds/img.jpg?width=980" id="d401d" class="rm-shortcode" data-rm-shortcode-id="c9c9eee1f9adc4c1d5edeca1af986a84" data-rm-shortcode-name="rebelmouse-image" alt="Hernan Lopez" />Hernan Lopez started Wondery with the belief that in-depth, narrative audio stories were poised to bloom.<p>Amazon is in "exclusive talks" to buy podcast company Wondery and subsume its 30 hit shows and over 8 million monthly listeners into its empire, the Wall Street Journal reported on Wednesday.</p> <p>The talks reportedly value Wondery above $300 million, in line with previous estimates from analysts, when Apple and Sony were said to have expressed interest.</p> <p>Wondery has produced dozens of original series including "Dr. Death" and "Business Wars," and has 19 shows currently in development to become television series. </p> <p>The company does not publicly disclose its financials, but chief executive Hernan Lopez has previously said the company is profitable. About three-quarters of Wondery's revenue comes from advertising, but Lopez has said the company's revenue share from content licensing is growing (Wondery owns the intellectual property for all of its originals). It also launched a subscription service, Wondery Plus, in June and is currently looking to expand its international footprint. </p> <p>Wondery, the West Hollywood-based company with the largest audience of any independent podcast producer, has been the subject of swirling rumors that several suitors are interested in acquiring it.</p> <p>After a pandemic-induced decline that struck much of the podcasting industry, Wondery's audience has surpassed its pre-COVID levels. Its Q3 revenue was about double year-on-year and its Q4 performance has been strong, Lopez previously told dot.LA. </p> <p>Podcasting overall now attracts over 100 million monthly listeners, according to Edison Research. The Interactive Advertising Bureau projects podcasting revenues to exceed $1 billion by 2021.</p> <p>That growth has spurred somewhat of an arms race, most evident in Spotify's spending spree, which also has helped that company diversify from its reliance on streaming. Amazon Music is one of Spotify's biggest competitors along with Apple Music, and <a href="https://www.wsj.com/articles/amazon-music-joins-podcasting-fray-11600261201?mod=article_inline" target="_blank" rel="noopener noreferrer">recently expanded into podcasts as well</a>. </p> <p>Acquiring Wondery would give Amazon more content to slide into Amazon Music, a scaled-down version of which is free for Amazon Prime subscribers. Combining that content with its Alexa smart speaker also could empower the company to capture more eyes and ears in the increasingly competitive attention economy. </p> <p>The talks are reportedly ongoing and no deal has been confirmed. </p>
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LA Tech Updates: Fidelity Reportedly Seeks to Unload Bird Shares at a Loss; Warner Bros Streaming 2021 Releases; Plug-In South LA's Accelerator for 2021
Fidelity Reportedly Seeks To Unload Bird Shares at a Loss<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjkwMTI2OC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyOTc0NTgyM30.2gHsdIxx6hnX0sV0Evq4Xdc-UsOWfaDn5sxhMhUWVoQ/img.jpg?width=980" id="e3f93" class="rm-shortcode" data-rm-shortcode-id="7034229cee2777d3a9f7e45313d88a5b" data-rm-shortcode-name="rebelmouse-image" />Escooter Unicorn Bird Seeks to Unload Santa Monica HQupload.wikimedia.org<p>Fidelity Investments is attempting to unload some of its shares in Bird Rides Inc. at a loss, <a href="https://www.businessinsider.com/bird-investor-fidelity-selling-stake-scooter-2020-12?r=US&IR=T" target="_blank">according to a report</a> published Wednesday night by Business Insider.</p><p>The move comes <a href="https://dot.la/bird-scooter-2648232688.html" target="_self">after dot.LA reported in October</a> that the mutual fund giant has marked down the value of its Bird investment by 17% since the beginning of the year.</p><hr><p>As a private company, Bird does not have to share its financials. Nor do the venture funds that hold most of its shares. However, Fidelity is required to account for shares at their fair market value so it provides a rare glimpse into the company's health.</p><p>But a source close to the matter said the sale should not be seen as any indication of Bird's financial performance. The shares represent less than ten percent of Fidelity's position and the intended sale is the result of a new portfolio manager taking over who does not want to invest in pre-IPO companies, the source said. </p><p>Neither Bird nor Fidelity would respond to dot.LA's request for comment.</p><p>Bird <a href="https://www.inc.com/magazine/201902/will-yakowicz/bird-electric-scooter-travis-vanderzanden-2018-company-of-the-year.html" target="_blank" rel="noopener noreferrer">became the fastest company in history</a> to reach unicorn status in 2018 and achieved a $2 billion valuation less than a year later. But as the pandemic hit, it abruptly laid off 406 employees <a href="https://dot.la/bird-layoffs-meeting-story-2645612465.html" target="_self">via a Zoom call</a> and was forced to remove its fleet from city streets just as it was gearing up for its normally lucrative summer season. </p><p>dot.LA reported in October the company <a href="https://pbs.twimg.com/media/EjstMVqVoAAWd7f.jpg" target="_blank" rel="noopener noreferrer">put its Santa Monica offices up for sublease</a> less than a year after completing a costly renovation.</p><p>Bird has maintained <a href="https://www.bird.co/blog/empty-streets-effect-pandemic-unexpected-lesson-life-after-cars/" target="_blank" rel="noopener noreferrer">the pandemic has been a positive</a> as riders prefer scooters over crowded buses and subways. <a href="https://www.bird.co/blog/scooter-riders-making-comeback-riding-longer-than-ever/" target="_blank" rel="noopener noreferrer">It says it is seeing riders take longer trips</a> than they did before the pandemic. </p><p>Last month, <a href="https://dot.la/bird-ipo-2648944903.html" target="_self">Bloomberg reported</a> Bird is looking to go public via a blank-check company. Bird said it had no plans to go public "this year," which did not exactly rule out a SPAC sometime in the near future. </p>
Plug-In South LA Opens New Accelerator Cohort for 2021<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDg2MzAxMS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1MTg0MTM1Mn0.QPKaMFTusp_uKe5Td0K77QKhp7KXUY6_An5edQ588VM/image.jpg?width=980" id="460a2" class="rm-shortcode" data-rm-shortcode-id="c53839f0b8ac6658fd10bb2da6ea53f8" data-rm-shortcode-name="rebelmouse-image" /><p>Plug In South LA's Accelerator Program is returning in 2021. The outfit is looking for 10 Black and Latinx founders who have proof of product-market fit and traction. The organization, founded in 2015 by Derek Smith, aims to build a network for Black and Latinx founders in South Los Angeles.<br></p><p>Last year was the inaugural accelerator program funded by Verizon, Silicon Valley Bank and Nike. The 2019 cohort hosted five startups including Spooler, a tech-based clothing design startup that credits the program with helping to increase revenue two fold since March. During the program, the company received a contract to launch a Sesame Street active wear product line. </p><p>The last day to <a href="http://pluginsouthla.com/accelerator" target="_blank">apply for the program</a> is Dec. 9 </p>
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