Snap shares soared as high as nearly 17% in after-hours trading Thursday after reporting its highest rates of revenue and user growth in four years.
It's not surprising the company grew compared to the same time last year, when advertisers pulled back spending, but Snap's rosy projections for the upcoming quarter suggest the post-pandemic bump wasn't a quirk.
Snap told investors on Thursday it forecasts 58% to 60% year-over-year revenue growth in the third quarter. Share prices approached the record-highs that Snap saw in February following the company's announcement that it anticipates 50% revenue growth for the next several years.
Analysts had expected a big year-over-year jump this quarter as the pandemic subsided and advertisers spent more. Snap nevertheless exceeded expectations, hitting 293 million users and more than doubling revenue.
CEO Evan Spiegel said he expects growth to continue as Snap moves deeper into ecommerce with ongoing investments in features like AR shopping.
Analysts agree that Snap has plenty of room to further monetize that, along with other relatively new features like Maps and Spotlight, the TikTok-like, algorithmically-surfaced video feed that Snap launched in November. The company grew its Spotlight daily active users 49% quarter-over-quarter.
Spiegel told investors Snap is not ready to turn Spotlight into a revenue generator.
"We've done small testing with advertising in Spotlight but for now we're just really focused on the core experience," Spiegel said. "We've got a great roadmap of improvements and we just don't want the team to get distracted, frankly, with monetization at this point."
Snap pulled in $3.35 per user globally, beating Wall Street expectations. Still, that figure still lags behind competitors like Twitter (around $5) and Facebook (over $13). Analysts believe that, too, gives Snap room to grow.
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Bitmojis are getting an upgrade on Snapchat with a new 3-D design that rolls out Monday.
Snap Inc. is decking out its avatars with more than 1,200 combinations of poses, gestures and backgrounds like cow prints and beach locations. The new avatars are full-body designs with new "Pixar"-like quality that can be shared on and off the platform.
It comes the same day Snap confirmed that it acquired Culver City-based Vertebrae. The AR and 3-D platform helps brands and retailers translate their clothes and accessories digitally. Terms of the deal weren't disclosed. But both moves illustrate Snap Inc.'s intentions to move further into virtual fashion.
The new avatars show much more detail from stitching on outfits to the sparkle of jewelry. That level of detail could help entice brands. Already, users are able to buy some of the clothes featured on Bitmoji. With the addition of accessories, there is the potential for more revenue sources.
Snap has used Bitmoji, which it acquired from Bitstrips in 2016, as an entry into gaming, merchandise and other areas. The company has used the avatars to partner with fashion brands from Levis to Ralph Lauren. Last year, Snap made a big push into gaming with Bitmoji Paint, a game that lets users collaboratively paint a pixelated canvas. The company also announced last year it was creating Bitmoji TV.
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Internships can open many doors, but those in tech can be especially tough to land and not always the most welcoming environment for women and people of color.
The nonprofit LATech.org launched an initiative with county supervisor Holly Mitchell this week to provide 1,000 students of color paid tech internships with companies like Snap Inc, ride sharing service HopSkipDrive and Cornerstone OnDemand.
The idea is not only to make the process more accessible for students, but also to encourage a pipeline of talent in a lucrative industry traditionally dominated by white men.
After the murder of George Floyd, LATech.org founder and former co-chair and founder of talent management system Cornerstone OnDemand Adam Miller thought it was "necessary" for him to use all his resources to help the most vulnerable in his community.
So far, fifty companies are participating, with each taking at least two interns at a time.
In the long run, it aims to open up a path to prosperity and chip away at deep-seated inequities.
"The average person who enters work in tech, relative to most in other fields, will, over the course of their lifetime, earn $2 million more," said Miller.
Entering an internship can be intimidating for anyone, and even more so when you are the only person of your race or ethnicity. Miller believes that by pairing interns up, this will provide a community and lessen the sense of being "the diverse intern." He also hopes that initiatives like this can help students realize that you don't need to be an engineer to work in tech in Los Angeles -- internships offered will span: design, marketing, product development and sales in addition to engineering.
The cost of the fellowship for the first 100 interns from South LA will be split between Mitchell's office and the companies.
Kristen Mae Hernandez, a senior at California State University Long Beach who is participating in the program said that as a woman of color she felt like an "other" in the predominantly white field of STEM.
"Even when I was accepted into [California State University] Long Beach, I faced a lot of prejudice. I had a lot of impostor syndrome," said Hernandez.
LATech.org will supplement the learning experience with multiple networking events as well as career counseling sessions. There will be six sessions over the span of the next two years. Every two weeks, a separate cohort will come in with around 20-30 students, all of whom range from 16 to 24.
Miller sees this as an opportunity for tech companies to diversify their ranks.
"Talent comes in all shapes and sizes, and the tech industry has a very tight labor market. The reality is that they're only looking at a portion of the pool. There is tremendous opportunity," said Miller.
The company aims to expand its roster of participants, and eventually have up to 100 companies involved.
"This is the largest such initiative in any city," said Miller. "So, if this works we hope to inspire other tech hubs to do the same."
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