Snap Shares Explode After Company Reports Q2 Results

Snap saw its shares soar on Tuesday after the company beat revenue estimates and revealed that it had added more users in its fiscal second quarter than were expected.

Shares were up 11.5% in after-hours trading as Wall Street digested the report.

For the second quarter, Snap reported revenue of $388 million while $360.5 million had been expected. Adjusted loss per share was 6 cents compared to a loss of 10 cents expected. Daily active users at 203 million were also better than the 191.7 million that was expected.

The company’s adding of 13 million daily active users during the second quarter was the highest net add for Snap since 2016.

The company’s average revenue per user (ARPU) also increased 37% to $1.91. North American ARPU posted the biggest gains since the second quarter of 2017, climbing 42% over last year to $3.14.

Snap CEO Evan Spiegel said more than 75% of the 13- to 34-year-old population in the U.S. is active on Snapchat. He said on the earnings call that the platform was “larger than services like Facebook and Instagram” among this audience.

It was also revealed that the users who had joined 5 years ago and were active at the end of their first year had retaining of over 95% annualized rate.

“We believe this high retention rate underscores the important role Snapchat plays in the lives of the people who use our products,” Spiegel explained.

Spiegel also said on the call, “We’re proud of the results that our team delivered this quarter. We added 13 million daily active users, our highest net adds since the second quarter of 2016, bringing our daily active users to 203 million. The average number of Snaps created every day grew to more than 3.5 billion this quarter and average time spent per user was over 30 minutes per day. Our revenue growth rate accelerated both quarter-over-quarter and year-over-year to 48%, yielding $388 million in total revenue for the quarter.”

Disclaimer: We have no position in Snap Inc. (NYSE: SNAP) and have not been compensated for this article.