Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa Bay news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Charlotte news in your inbox

Catch up on the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Rebecca Zisser /Axios

For months, Snapchat has been challenging the narrative that slower user growth is due to Facebook adopting copycat features, like Stories and Stickers. Snap will have another copycat headache to explain to investors tomorrow on its second earnings call — Facebook is building a product that could rival Discover, its successful video content platform.

Why it matters: As Axios reported earlier this week, video content has performed incredibly well on Discover, but Snapchat has yet to break out to investors how much revenue that platform drives.

  • Expect analysts and investors to ask how Snapchat plans to cash in on Discover, and retain user attention and engagement once Facebook's rival feature is live.
  • Expect Snapchat to say its platform is uniquely positioned to serve younger audiences because it's mobile-first, while Facebook's is based on desktop and mobile consumption.

Snapchat's platform also focuses on hard news and politics, as opposed to influencer and viral publisher content, which seems to be Facebook's strategy by launching with partners like ATTN and Seeker.

The other big number: Average revenue per user (ARPU) — Snapchat, like Facebook and other U.S. social/tech companies, makes most of its revenue from users in North America, though most of its user base is elsewhere around the world (breakdown below). Expect Snapchat to tout its major investments in advertising technology, like its newly-launched self-serve ad platform, during Thursday's earnings call, and expect investors to react to how those investments affect ARPU.

Revenue breakdown: 42% of Snapchat's daily active users (DAUs) come from North America, and they accounted for 86% of Snapchat's total revenue last quarter. The ARPU in North America is 952% higher than in the rest of the world. This disparity exists within most data-based advertising companies, because the U.S. ad market is so much more lucrative and because access to cheap data in the U.S. fosters higher user loyalty.

Expand chart
Data: Snapchat 2017 Earnings Report; Chart: Andrew Witherspoon / Axios

Users: Wall Street will expect to see continued user growth and increased engagement despite Snap's arguments that it's prioritizing quality over quantity. However, user growth looks grim for Snapchat, which has seen stagnant growth in recent quarters since Instagram launched a copycat "Stories" feature. Expect Snapchat to instead focus on user loyalty, especially among younger users. (The average Snapchat user opens the app 18x per day and spends over 30 minutes on the platform daily.)

Nearly half of Snapchat's U.S. audience is younger than 34. Per comScore (U.S. June 2016):

  • Persons 18-24 — 24%
  • 25-34 — 24%
  • 35-44 — 18%
  • 45-54 — 16%
  • 55-64 — 13%
  • 65+ — 4%

Profit: Snapchat had a $160 million net loss on around $150 million in revenue during Q1. Expect the losses to continue, especially since Snap has invested in so many advertising and product tech updates. However, as a long-time Snap investor told Axios in January, unprofitable companies need to show discipline and a path to profitability once they're public.

Advertising: A large piece of Snap's IPO pitch was its ability to continue to drum up ad dollars, going from $0 to ~$400 million in ad revenue from 2014-2016. The company has made huge strides in beefing up its ad program over the past several months, including launching a self-serve ad platform in May that will allow Snap to compete with Facebook and Instagram for small business dollars. Analysts estimate that these investments will help Snap continue to significantly grow its ad revenue, by far its largest revenue stream. eMarketer predicts Snap will grow ad revenue by 158% this year, and by 66% and 73% in 2018 and 2019.

Stock: Snap's stock has had a rocky few months since debuting on the NYSE. On Wednesday its stock sat at $13.56, around three-and-a-half dollars lower than when it went public.

Go deeper

8 hours ago - Politics & Policy

Kellyanne Conway's parting power pointers

Kellyanne Conway addresses the 2020 Republican National Convention. Photo: Nicholas Kamm/AFP via Getty Images

Kellyanne Conway has seen power exercised as a pollster, campaign manager and senior counselor to President Trump. Now that his term in office has concluded, she shared her thoughts with Axios.

Why it matters: If there's a currency in this town, it's power, so we've asked several former Washington power brokers to share their best advice as a new administration and new Congress settle in.

8 hours ago - Politics & Policy

GOP holdouts press on with plans to crush Cheney

Screenshot of emails to a member of Congress from individuals who signed an Americans for Limited Government petition against Rep. Liz Cheney. Photo obtained by Axios

Pro-Trump holdouts in the House are forging ahead with an uphill campaign to oust Rep. Liz Cheney as head of the chamber's Republican caucus even though Minority Leader Kevin McCarthy told them to back down.

Why it matters: What happens next will be a test of McCarthy's party control and the sincerity of his opposition to the movement. Cheney (R-Wyo.) is seen as a potential leadership rival to the California Republican.

Democrats aim to punish House GOP for Capitol riot

Speaker Nancy Pelosi passes through a newly installed metal detector at the House floor entrance Thursday. Photo: Drew Angerer/Getty Images

House Democrats plan to take advantage of corporate efforts to cut funding for Republicans who opposed certifying the 2020 election results, with a plan to target vulnerable members in the pivotal 2022 midterms for their role in the Jan. 6 violence.

Why it matters: It's unclear whether the Democrats' strategy will manifest itself in ads or earned media in the targeted races or just be a stunt to raise money for themselves. But the Capitol violence will be central to the party's messaging as it seeks to maintain its narrow majorities in Congress.