The news: Snap beat analyst expectations in Q1, with steady revenue growth driven by automation, emerging ad formats, and a strong subscription base. While the company’s US daily active users (DAUs) declined 7% YoY, its global DAU count grew 5%.

By the numbers:

• Revenues: $1.5 billion, +12% YoY
• Snapchat DAUs: 483 million, +5% YoY
• North America DAUs: 92 million, -7% YoY
• Snapchat MAUs: 956 million, +5% YoY

While Snap did not break out specific ad revenue figures, ad formats like Sponsored Snaps, which are delivered in users’ chat feeds, helped grow per-impression clickthrough rates by 226% and 7-day conversion volume by 59%. Dynamic Product Ads, an automated ad personalization tool, saw revenues grow over 30% YoY.

Zooming in: Double-digit revenue growth suggests that Snap is drawing marketer interest despite uneven user growth.

• Brands can automate various aspects of campaigns including creative and targeting using AI-powered Smart Campaign Solutions, making it easier to run campaigns on the platform—and making Snap a more compelling performance driver.
• The company is pitching Snapchat as a shopping influence loop for its Gen Z audience, positioning the platform as a place where users move through discovery to purchase via private chats, peer validation, and AR try-ons.
• Unique ad formats and features like Snap Map and AR Lenses and Filters continue to attract brands by offering distinctive opportunities for marketers native to Snapchat’s platform.
• Even as overall user growth is uneven, Snapchat reached 25 million Snapchat+ subscribers earlier this year. That diversified monetization model is helping Snapchat grow revenues beyond audience scale alone.

Potential headwinds: Snap could see growth slow in upcoming quarters as it faces several challenges.