Snap Shares Soar After Earnings Beat and User Growth

Shares of Snap were flying higher on Thursday after the maker of SnapChat reported an earnings beat and user growth for the second quarter.

Snap shares were up 16% as Wall Street digested the numbers that beat across the board.

For the second quarter, Snap reported adjusted earnings per share of 10 cents compared to a 1 cent loss that was forecast by Refinitiv. Revenue at $982 million was better than the $846 million, expected by Refinitiv.

Global daily active users (DAUs) came in at 93 million vs. 290.3 million per StreetAccount Average revenue per user (ARPU) was $3.35 compared to the $2.92 expected per StreetAccount.

The company’s net loss narrowed 53% to $152 million, from a loss of $326 million a year ago.

Snap reported 293 million daily active users, up nearly 5% from the 280 million the company reported in April. This figure is up more than 23% compared with the 238 million daily users the company reported a year prior.

The company revealed also that it was not impacted by Apple’s iOS 14.5 privacy changes as it had anticipated that it would be.

The mobile operating system update rolled out later than expected. iOS users being slow to update their devices and Snap observing “higher opt-in rates than we are seeing reported generally across the industry, which we believe is due in part to the trust our community has in our products and our business,” said Jeremi Gorman, Snap’s chief business officer.

“This has given us more time with advertisers to navigate the transition but also means the effects of these changes will come later than we initially expected,” Gorman said.

Looking ahead, Snap expects year-over-year revenue growth of 58% to 60% for the third quarter.

This is down compared to the 116% annualized revenue growth it saw in Q2. Snap expects to reach approximately 301 million DAUs in the third quarter.

“This range reflects our best current estimate of the potential impact of anticipated disruptions associated with the iOS platform changes,” Snap Chief Financial Officer Derek Andersen said.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.