Evan Spiegel, co-founder and CEO of Snap Inc., speaks at the New Work Summit in Half Moon Bay, California, U.S., Monday, Feb. 25, 2019.
David Paul Morris | Bloomberg | Getty Images
Snap Shares rose about 13% in the company's after-hours trading Third quarter earnings report On Tuesday. The company beat expectations on both profit and revenue.
Here's how the company did it:
- Profit per share: 2 cents, adjusted, versus a loss of 4 cents expected by analysts, according to LSEG, formerly known as Refinitiv.
- income$1.19 billion versus $1.11 billion expected, according to LSEG.
- Global Daily Active Users (DAU): 406 million vs. 405.7 million expected, according to StreetAccount.
- Average revenue per customer: $2.93 vs $2.74 expected, according to StreetAccount.
The company highlighted sales growth in the quarter as revenue rose 5% year-over-year.
As part of Snap's “internal forecast,” the company said it expects fourth-quarter sales to be between $1.32 billion and $1.38 billion, compared with analysts' estimates of $1.33 billion. Snap said it was not providing official guidance for the fourth quarter “due to the unpredictable nature of the war,” reversing course from the previous quarter when it provided official guidance.
The company said it “observed pauses in large amounts of spending, mostly from brand-focused advertising campaigns following the outbreak of war in the Middle East,” affecting its current quarter sales.
The company's GAAP net loss widened 2% year-over-year in the third quarter to $368 million, or 23 cents per share.
Snapchat+, the company's subscription service that costs $3.99 a month, reached 5 million subscribers last quarter, up from 4 million the previous quarter.
In a statement, Snap CEO Evan Spiegel highlighted the company's “positive growth in the third quarter” and noted that its efforts to cut core costs are helping to improve the overall business.
Last summer, Snap announced last summer that it would lay off 20% of its workforce of more than 6,000 employees. Cost cutting continued last September when Snap said that it has shut down its augmented reality enterprise business, leaving 170 employees behind.
“We are focused on improving our advertising platform to deliver a higher return on investment for our advertising partners and have evolved our efforts to better serve our partners and drive customer success,” Spiegel said in a statement.
Snap said its chief operating officer, Jerry Hunter, is retiring after seven years with the company.
The company also said it has authorized a stock repurchase program of up to $500 million. It added that it has $3.6 billion in cash, cash equivalents and marketable securities as of Sept. 30, 2023.
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