Snap posted stronger second-quarter revenue and earnings than Wall Street expected and forecast a better third quarter too, sending its stock up more than 10% in extended trading. Revenue rose 19% from a year earlier as daily active users grew and revenue per user rose.
Snap's stock jumped more than 10% in extended trading after the company reported second-quarter revenue and earnings that beat Wall Street's estimates and issued a third-quarter forecast above analyst expectations.
Revenue rose 19% to $1.6 billion, above the $1.54 billion analysts expected, according to LSEG. Snap's net loss narrowed to $164 million, or 10 cents per share, from $262.6 million, or 16 cents per share, a year earlier. Adjusted earnings reached $250 million, ahead of the $192 million analysts had estimated, according to StreetAccount.
Daily active users and revenue per user rise
Global daily active users rose 5% from a year earlier to 493 million, above the 487 million analysts expected. Average revenue per user climbed to $3.25, above the expected $3.16, according to StreetAccount. Still, North American daily active users fell 7% year over year to 92 million and stayed flat compared with the first quarter.
According to CNBC, Spiegel said in an investor letter: "saw improving momentum in our advertising business." Spiegel added that the quarter also got a lift from spending tied to the World Cup.
Guidance tops estimates as costs climb
Snap forecast third-quarter sales of $1.7 billion to $1.74 billion, above the $1.7 billion analysts expected, with adjusted earnings between $300 million and $350 million. That range's midpoint of $325 million trails analysts' estimate of $327 million, according to StreetAccount.
At the same time, Snap raised its full-year infrastructure cost forecast by $50 million to between $1.65 billion and $1.7 billion, which it said covers added investment in AI and machine learning infrastructure to support revenue growth. Snap's other revenue category, which includes the Snapchat+ subscription, rose 85% year over year to $316 million.
Ad rivals had a rockier week in the stock market
Reddit's second-quarter results beat estimates, but the company flagged volatile search-referral traffic, and its shares fell. Meta shares also dropped after the company issued a weaker-than-expected sales forecast and reported dwindling free cash flow tied to its AI spending.
Source: CNBC
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