Snapchat IPO

Surprise: The olds are flocking to Snapchat

Lou Adler, wearing Snapchat's Spectacles, attends a basketball game at Staples Center on November 15, 2016 in Los Angeles.
Noel Vasquez | Getty Images

There's a common stereotype about Snapchat: It's beloved among teens and millennials, cryptic to everybody else.

Parent company Snap admitted the issue in the "Risk Factors" section of its IPO filing last Thursday, writing:

Moreover, the majority of our users are 18-34 years old. This demographic may be less brand loyal and more likely to follow trends than other demographics...Snapchat also may not be able to penetrate other demographics in a meaningful manner. For example, users 25 and older visited Snapchat approximately 12 times and spent approximately 20 minutes on Snapchat every day on average in the quarter ended December 31, 2016, while users younger than 25 visited Snapchat over 20 times and spent over 30 minutes on Snapchat every day on average during the same period

Snap also devoted almost 20 pages of the filing giving a detailed explanation of how its product works -- presumably for the older investors who know their kids love Snapchat but have never been able to figure it out for themselves. (Disclosure: I'm 47 and that description fits me to a T.)

But according to research from MoffettNathanson, Snapchat has already started to buck that stereotype. The firm found that the fastest growing cohort of Snapchat users is people over 35.

Specifically, 33 million U.S. users over 35 used Snapchat in the last quarter of 2016, compared with only 10 million the year before -- growth of 224 percent. Breaking it down further, growth is particularly fast among women over 35 -- 19.5 million unique users in the last quarter of 2016, up 320 percent from the previous year's 4.6 million.

Growth among users in the 24-to-34 age range was much slower, at 74 percent, and growth among 18-to-25-year-olds was only 24%.

Snapchat still has much smaller reach in the over-35 crowd than its competitors -- it reaches only 33% of the total U.S. audience over that age, compared with a whopping 88% for Facebook, 45% for Facebook-owned Instagram, and 42% for Twitter.

But the fast growth among older users suggests Snap won't be confined to a teenage ghetto, but has lots of room to expand.

As MoffettNathanson concludes, Snapchat is "not quite the rocket ship Facebook was off the launch pad," but "we also don't believe it will flame out and ultimately fail as spectacularly as Twitter."

--Additional reporting by Michael Bloom