They bid before you did. That is the only way for them to win by 2 cents. Bidding before you using eBay proxy bidding. It's not possible sniping. Unless they also sniped before you.
That is where some of the beauty of when to place your snipe comes into play. I sometimes do my snipe at about 30 seconds on items I know will end within about a $1 range. i.e. DVD's. They always end near the same price. I snipe at 30 seconds knowing the next sniper will have to bid at least one increment higher than me. If I guess I win, and maybe save 25-50 cents or so. Mainly it's just that I win.
The same can be done for pricier items, but it's a little harder to know what price the item will end at. If you are good though and can guess within a bid increment then maybe try sniping earlier and forcing the other sniper to have a bid one increment above yours.