Snap smashes forecast with stronger-than-expected earnings and user growth
Shares in Snap Inc. surged in after-hours trading today after the social media company smashed analysts’ estimates for its quarterly earnings.
For the quarter ended June 30, Snap reported revenue jumped 116% from a year ago, to $982 million. Adjusted earnings before interest, taxes, depreciation and amortization came in at $117 million, or 10 cents a share, up 223% from a loss of $95.6 billion in the second quarter of the year.
Analysts polled by Refinitiv had been expecting revenue of $846 million on a loss of one cent per share.
Snap’s strong-than-expected earnings came off the back of strong user growth. Snap reported 293 million daily active users in the quarter, up 55 million or 23% year-over-year and up 5% from the previous quarter. Analysts had been predicting 290.3 million.
Snap did report a net loss of $151.6 million, but that figure is also a vast improvement from a net loss of $326 million a year ago.
Highlights in the quarter included a range of new try-on capabilities, including Lens Studio 4.0 and a service called TrueSize. The latter improves eyewear sizing and wrist tracking technology for accurate watch try-ons.
Snap’s content offerings also increased in the quarter with eight new and renewed Snap originals and 177 new Discover channels. Spotlight daily active users — that is users accessing Snap’s original and curated content — increased 49% in the quarter.
“Our second-quarter results reflect the broad-based strength of our business, as we grew both revenue and daily active users at the highest rates we have achieved in the past four years,” Snap Chief Executive Officer Evan Spiegel said in the company’s earnings report. “We are pleased by the progress our team is making with the development of our augmented reality platform and we are energized by the many opportunities to grow our community and business around the world.”
For the third quarter, Snap estimates a revenue increase of between 58% and 60% year-over-year, resulting in revenue of between $1.07 billion and $1.085 billion. Adjusted earnings are expected to be between $100 million and $120 million.
The numbers were extremely well-received. Shares in Snap surged almost 18% in after-hours trading.
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