Snapchat reportedly hit 160M daily users and $400M revenue in 2016

Some Snap Inc stats have leaked ahead of its expected IPO filing today, and they show strong progress in earning money, but slowed user growth.

The Information (paywalled) reports that Snapchat has 160 million daily users, up from 130 million at the end of Q1 2016, and the 150 million number Bloomberg reported in June. Their source indicated user growth slowed in the second half of 2016. That could in part be due to the rise of Snapchat Stories clone Instagram Stories, which we reported this week has been stealing Snapchat usage, according to analytics providers and social media talent managers.

Snapchat Taco Bell LensRevenue looked brighter, reaching $400 million in 2016, which is in line with what analysts had estimated and was reportedly higher than the $350 million high-bar set by Snap’s team internally. That shows Snap is finding ways to squeeze a lot of money out of its relatively small user base, thanks to highly engaging sponsored animated selfie lenses and full-screen snap ads.

[Update: Snap Inc has now officially filed to IPO, revealing that it has 158 million daily users and saw $404 million in revenue in 2016.]

Snapchat isn’t trying to sell the story of scale with a flashy monthly user count, since people who only open the app once a month aren’t very monetizable. That strategy didn’t pan out for Twitter, especially because monthly user count inevitably gets compared to Facebook’s enormous 1.86 billion users.

Instead it’s touting its high time-spent per user and average revenue per user, which The Information’s Tom Dotan and Amir Efrati report was $2.70 per user over the course of 2016. Snapchat has done an impressive job soaking up attention by covering three different use cases with a single app: private messaging, social media Stories broadcasting, and professional Discover content. These work together to give people something to do¬†even if their friends don’t post interesting stories, they’re waiting for people to reply, or they don’t resonate with the featured publishers.

The problem there is that Snapchat’s lead over Instagram in time spent in app per Android user has shrunk in the US and turned into a deficit internationally, according to App Annie metrics reported by BuzzFeed’s Alex Kantrowitz. Snapchat had more time spent per user worldwide in early 2016, but by December, Instagram had raced past it to a 25% lead. In the US, Snapchat had a 35% lead as of December 2015, but that sank to a 20% lead by December 2016 after Instagram Stories took its toll.

That’s partly why Bloomberg reports Snap Inc is touting what users do during their time in Snapchat — specifically apply its uniquely illustrated geofilter place names, and store photos in its Memories feature. Those are things users can’t do in Instagram.

Snap is also relying on strong initial international growth in Western Europe and Australia to show it still has plenty of users to add. There it will be racing against Facebook’s various products, including Facebook Stories, WhatsApp Status, Messenger Day, and the already succesful and highly international Instagram Stories. But Snapchat still offers by far the most advanced creative tools, and is known as the trendsetting pioneer, which could give it extra clout as it expands.

Later today we’ll hopefully be back with the official S-1 IPO filing with much more detail on Snap’s progress as the camera company prepare to become a public company.