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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

Report: U.S. calls for UN-led Afghan peace talks

Secretary of State Antony Blinken at the State Department in Washington, D.C., in February. Photo: Jim Lo Scalzo/EPA/Bloomberg via Getty Images

Secretary of State Antony Blinken proposed in a letter to President Ashraf Ghani steps including a UN-facilitated summit to revive stalled peace talks between the Afghan government and the Taliban, Afghanistan's TOLOnews first reported Sunday.

Why it matters: Blinken expresses concern in the letter, also obtained by Western news outlets, of a potential "spring offensive by the Taliban" and that the "security situation will worsen and the Taliban could make rapid territorial gain" after an American military withdrawal, even with the continuation of U.S. financial aid.

Harry and Meghan accuse British royal family of racism

Photo: Joe Pugliese/Harpo Productions via Reuters

Prince Harry and Meghan Markle delivered a devastating indictment of the U.K. royal family in their conservation with Oprah Winfrey: Both said unnamed relatives had expressed concern about what the skin tone of their baby would be. And they accused "the firm" of character assassination and "perpetuating falsehoods."

Why it matters: An institution that thrives on myth now faces harsh reality. The explosive two-hour interview gave an unprecedented, unsparing window into the monarchy: Harry said his father and brother "are trapped," and Markle revealed that the the misery of being a working royal drove her to thoughts of suicide.

Updated 4 hours ago - Axios Twin Cities

In photos: Thousands rally for George Floyd ahead of Derek Chauvin's trial

Demonstrators on March 7 outside the Hennepin County Government Center, where the trial of former Minneapolis police officer Derek Chauvin, charged with murdering George Floyd, will begin in Minneapolis, Minnesota. Photo: Chandan Khanna/AFP via Getty Images

Thousands of protesters marched through Minneapolis' streets Sunday, urging justice for George Floyd on the eve of the start of former police officer Derek Chauvin's trial over the 46-year-old's death, per AFP.

The big picture: Chauvin faces charges for second-degree murder and manslaughter over Floyd's death last May, which ignited massive nationwide and global protests against racism and for police reform. His trial is due to start Monday, with jury selection procedures.