Snapchat parent company Snap filed to become a public company today, and arguably the largest threat to its future, Facebook, had its quarterly earnings call yesterday. One topic that kept popping up throughout the call was Instagram, the Facebook-owned photo- and video-sharing service which could well undermine Snap’s chances of becoming a profitable publicly traded company. Facebook CEO Mark Zuckerberg tried to buy Snapchat for $3 billion back in 2013, and was rebuffed. Since then, Facebook has tried to copy multiple features from Snapchat’s app for standalone Facebook apps, and recently inserted what’s more or less a clone of Snapchat into Instagram, on top of its original features.

Without actually mentioning Snapchat on the call, Facebook made a series of comments about Instagram that may keep Snap executives and potential investors up at night before their initial public offering:

Mark Zuckerberg talked about the long-term strategy for Instagram’s growth, and the fact that in a few months, the company created a new product identical to Snapchat’s Stories that already has more than the 110 million users as Snapchat’s entire app is reported to have:

Over the next five years, we’re going to keep building ecosystems around our apps that a lot of people are already using. Growth and engagement on Instagram have been strong. We announced in December that Instagram now has over 600 million monthly actives and recently passed 400 million daily actives. Instagram Stories reached 150 million daily actives just five months after the launch, and we’ve added new features like Boomerang and Live into Stories and I’m excited to see that continue to grow.

Chief operating officer Sheryl Sandberg discussed Instagram’s success has finding ways to provide services to businesses, beyond just selling ads to them—something Snap has not been able to do—by leveraging a model originally built by Facebook:

We’re really excited to announce today that 65 million businesses are using our free Pages product and 5 million are using Instagram Business profiles. More and more of these businesses are becoming advertisers with over 4 million advertising on Facebook and over 500,000 on Instagram. As a result, our revenue base is becoming more diverse. In Q4, our top 100 advertisers represented less than a quarter of our ad revenue, which is a decline from Q4 last year.

Sandberg explained how granular Facebook can get with its advertising products for businesses—whereas right now, Snapchat only offers video ads and sponsored filters for users’ snaps:

To make our ad products as relevant and effective as possible, we’re increasingly tailoring them by vertical. In 2016, we invested in Dynamic Ads, which allow advertisers to automatically promote products from their entire catalog. We expanded Dynamic Ads across Facebook, Instagram, and the Audience Network, and tailored them for verticals like travel and retail.

Sandberg implied there’s still a lot of room for growth in Facebook and Instagram’s advertising businesses:

With only a small fraction of the businesses on Facebook and Instagram advertising, we know we have a lot of opportunity and hard work ahead. In 2017, we’ll stay focused on helping businesses of all sizes reach customers around the world and grow.

Echoing Sandberg’s implication that there is still more room for Instagram to grow, chief financial officer David Wehner explained that Instagram helped Facebook show more ads to more people, and generate more revenue, than it did in the same quarter a year earlier:

On the supply side, growth in users, time spent, and ad load also contributed to our strong results. In Q4, the average price per ad increased 3% and the total number of ad impressions served increased 49%, driven primarily by mobile feed ads on Facebook and Instagram.

An analyst asked Zuckerberg how Instagram’s audience differs from Facebook’s core audience, and his answer explains how Instagram is perfectly aligned to fill the same need that Snapchat does:

Instagram is a follow model, right, so it’s—they’re not all bidirectional friendships [like on Facebook]. A larger portion of the content is public content. More of the content is visual, right. Facebook has a mix of text and news and links and visual content like photos and videos. And Instagram creates a pure experience that’s focused on photos and videos. So all those good and subtle decisions that [Instagram CEO] Kevin [Systrom] has made over the years add up to creating a different kind of community that what we’re finding and that’s great, is that it’s really complementary to what people are doing on Facebook. And some of what we found is that as we encourage people to use both Facebook and Instagram, engagement on both can increase. So that is great. And that I think speaks to how you can build these different kinds of communities with different connections in a way that really is creating new value in people’s lives.

Another analyst asked about Facebook’s plans to monetize videos on its platforms. Sandberg’s response shows the company’s familiarity with advertising agencies and big brands and their interest in working with Facebook—even despite recent advertising metrics misstatements:

As consumer video has grown in News Feed, it’s given us that opportunity for video ads because the format of the ads fits the format of what consumers are doing. And we’re seeing a lot of great examples of people using ads in the feed across Instagram and News Feed.

To share one example, Motorola, working with Ogilvy and Moto Mento, launched the Moto Z phone, and they did awareness boosting before they launched, targeting Android users and Verizon subscribers. And they optimized their video for the Facebook and Instagram mobile feeds. And then after they launched, they did purchasing ads and re-targeted people who had viewed those initial ads. That’s just a great example of someone using video ads, optimizing a format, but also using the pretty unique targeting we can offer to drive sales. They measured that they had over a 3.5% lift in sales driven by the Facebook and Instagram video ads.

Sandberg also discussed how the end-goal of Facebook’s advertising products is to help businesses increase their sales—and how the company can prove that to businesses, something that Snapchat has struggled with:

What matters the most is the A/B test that these people saw ads on Facebook and Instagram, these people didn’t, and here’s the sales lift. And all of the other metrics, although important and we’re working hard, are proxy metrics, and those metrics are going through a platform shift that we need to work on.

It’s likely that engagement—time spent on a social network, and how much users interact with its content—will be a metric that Snap focuses on in its filings, given that, as The Information pointed out (paywall), spending longer in an app gives a company more time to show ads to that user. Snapchat doesn’t have the largest user base, but if it has a really engaged group of users, advertisers—and investors—will be more interested. On the earnings call, Wehner said Instagram, and Facebook more generally, are seeing high levels of engagement:

Video is one of the big drivers of engagement growth on Facebook. It’s also helpful on Instagram where we’re also seeing the benefit of ranking changes. So we continue to see good engagement and time spent growth across the Facebook family and on just Facebook, and video is a part of that story. So it’s an important part of that story.

One of Snapchat’s major benefits is that it has a younger audience—that marketers are after (and who can mature along with the company)—than its competitors. Wehner said this same generation is also on Instagram, and the company is figuring out how to better target them every day:

Instagram is obviously another great place to reach Millennials, and we continue to build our products to serve a wide variety of audiences, including Millennials as well.

In passing, Zuckerberg mentioned that he considers Instagram to be the Facebook Messenger of its messaging apps, compared with his other property, WhatsApp—meaning that Instagram and Messenger are more about sharing imagery than Facebook and WhatsApp, which tend to be used more for conveying information. While this isn’t a particular shot across the bow at Snapchat, it’s worth remembering just how many social and messaging products Facebook owns that have millions of users to sell advertising against—all of which could be a threat to Snap’s long-term successes:

[Facebook] Messenger is much more focused on being an expressive and rich environment that has lots of different types of content. Kind of more like Facebook to the Instagram example that we used before, whereas WhatsApp I think is a much more utilitarian experience with a much more stark UI where there’s just not as much emphasis on having a lot of different ways to engage.

Wehner added that Instagram still has the potential to be stuffed with more advertisements—what Facebook refers to as “ad load”—meaning it has the potential to generate more revenue off its current users, assuming they aren’t annoyed by seeing more and more ads: