Snap stock rockets up after surprise earnings beat
Evan Spiegel, co-founder and chief executive officer of Snap Inc., stands on the floor of the New York Stock Exchange during the company’s initial public offering on Thursday, March 2, 2017.
Michael Nagle | Bloomberg | Getty Images
Snap‘s stock price soared more than 18% after hours on Tuesday as the company posted an unexpected, adjusted profit along with positive user and revenue growth in its third-quarter earnings.
Here’s what they reported:
- Adjusted earnings per share: 1 cent vs. expected loss of 5 cents per Refinitiv
- Revenue: $679 million vs. $555.9 million per Refinitiv
- Global daily active users (DAUs): 249 million vs. 244.12 million per FactSet
- ARPU: $2.73 vs. $2.27 per FactSet
The company’s net loss fell to $200 million, down nearly 12% from $227 million net loss last year.
Snap reported 249 million daily active users, up nearly 4% from the 238 million the company reported in July. That figure is up nearly 19% compared to the 210 million daily users the company reported a year prior.
“The adoption of augmented reality is happening faster than we had previously anticipated, and we are working together as a team to execute on the many opportunities in front of us,” Snap CEO Evan Spiegel said in a statement.
Snap said it used the third quarter as an opportunity to engage with brands that were looking “to align their marketing efforts with platforms who share their corporate values.”
That coincides with the StopHateForProfit Facebook ad boycott in which more than 1,000 advertisers paused ads on the social network during the month of July in boycott of the company’s hate speech and misinformation policies.
“This gave us an opportunity to engage with advertisers and agencies in real time to ensure that our existing partners as well as new prospects understood our offering in relation to our values,” Snap Chief Business Officer Jeremi Gorman said in prepared remarks.
Snap expects year-over-year revenue growth of 47% to 50% for the fourth quarter, Snap chief financial officer Derek Andersen said in prepared remarks. The company also expects to reach approximately 257 million DAUs in the fourth quarter, Andersen said.
Snap, however, also expects year-to-year expense growth to be higher in the fourth quarter than it has observed year to date, he said.
“While there is continued uncertainty about the macro operating environment, we are pleased with the strength of the underlying momentum we have established with our advertising partners, and we remain highly optimistic about the long term prospects for our business,” Andersen said in his prepared remarks.
