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Illustration: Axios Visuals

Snapchat's parent company has had a bumpy ride through a series of product and corporate setbacks in 2018. But now it's slowly making a comeback.

Why it matters: Snap's story is yet another example of the harsh realities of going public and facing comparisons to expansive rivals—in this case, Facebook. Now that Snap is regaining momentum, investors' enthusiasm for the company's long-term potential is also creeping back.

Driving the news: Snap surprised Wall Street Tuesday with better-than-expected second quarter earnings results, proving that its efforts to expand globally are working.

  • The company added 13 million new daily active users last quarter, and increased the amount of revenue it made per user by 37% year over year. That marked the second quarter in a row that Snapchat posted user growth, after losing users last year.
  • Analysts were already anticipating strong growth, with many having upgraded Snap's stock ahead of the earnings report, but a 12% bump in Snap's stock price following the announcement shows that investors are bullish on Snap's forward outlook.

Between the lines: Among the slew of news the company discussed on Tuesday's earnings call, three points stood out as priorities for the company:

  1. AR: Snap is seeing positive momentum in its suite of creative tools, particularly its augmented reality product called Lenses. Snapchat estimates that a whopping 7 to 9 million of its 13 million new users joined the app because of the face swap filters.
  2. Discover: Snap says its content audience increased 35% year-over-year and that total daily time spent watching shows on its content platform Discover increased by over 60% year-over-year.
  3. Snap kit: Snapchat only recently unveiled its software kits, which let third-party developers integrate Snapchat tools and features into their apps. Snap says that 11 apps created by its partners are currently in the Top 100 of the iOS App Store and Google Play Store.

The big picture: Tuesday's outcome shows renewed investor optimism about Snap's prospects.

  • The company narrowed its quarterly losses to $255 million from $353 million this time last year, and also beat analyst expectations of its losses.
  • One of Snapchat's social media rivals, Twitter, faced similar challenges in its early years as a public company, but has now been profitable for the past six quarters.

Yes, but: Snapchat still has a long way to go to convince investors that it has the growth potential of rival apps like Facebook-owned Instagram, which already has more than 1 billion users globally, or even Chinese-owned karaoke app TikTok, which reportedly crossed the 1 billion mark for worldwide installs in February.

Go deeper: Snap stock price up after beating Q2 analyst expectations

Go deeper

9 hours ago - Health

Food banks feel the strain without holiday volunteers

People wait in line at Food Bank Community Kitchen on Nov. 25 in New York City. Photo: Michael Loccisano/Getty Images for Food Bank For New York City

America's food banks are sounding the alarm during this unprecedented holiday season.

The big picture: Soup kitchens and charities, usually brimming with holiday volunteers, are getting far less help.

11 hours ago - Health

AstraZeneca CEO: "We need to do an additional study" on COVID vaccine

Photo: Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

AstraZeneca CEO Pascal Soriot said on Thursday the company is likely to start a new global trial to measure how effective its coronavirus vaccine is, Bloomberg reports.

Why it matters: Following Phase 3 trials, Oxford and AstraZeneca said their vaccine was 90% effective in people who got a half dose followed by a full dose, and 62% effective in people who got two full doses.

Updated 13 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: Coronavirus cases rose 10% in the week before Thanksgiving.
  2. Politics: Supreme Court backs religious groups on New York coronavirus restrictions.
  3. World: Expert says COVID vaccine likely won't be available in Africa until Q2 of 2021 — Europeans extend lockdowns.
  4. Economy: The winners and losers of the COVID holiday season.
  5. Education: National standardized tests delayed until 2022.