A snappy second quarterSnap ends Friday 23% higher than it started, spurred on by an earnings release that reported the best user growth in four years.
Shares of social media giant Snap ended the week on a high, releasing its second quarter earnings and blowing away expectations. The company reported adjusted earnings per share of $0.10 on revenue of $982 million, compared to expectations of $0.01 in losses per share on revenue of $846 million. The stock was up over 16% before the bell, and opened at its highest price ever at $74.14, even flirting with the $80 mark before closing up just under 24% for the day. A big part of the jump was Snap’s user growth numbers, which were up 23% from the year before and reported 293 million daily active users (DAUs) compared to forecasts of 290 million, and the quick pic platform is earning $3.35 in revenue per user, compared to the $2.92 analysts expected.
Revenue was at its highest-ever level and its surge in daily active users was the best the platform had seen in four years, proving that Snap has been able to maintain the momentum it gathered during the pandemic, and keep up with the growing power of TikTok. The company had been wary of Apple’s iOS 14.5 update and the privacy changes it brought with it, but it looks like the update hasn’t had the catastrophic impact some were expecting.
Morgan Stanley analysts wrote in a Friday note. For the next quarter, Snap has forecast revenue of up to $10.08 billion.
Partner summit pushSnap holds its Partner Summit, and partners are clearly impressed as the share price jumps up by just under 6%.
The event, which broke boundaries this year by doing the whole thing through augmented reality, brought with it a whole host of new updates that got investors feeling positive, along with the announcement that it has reached half a billion monthly active users. The updates covered a bunch of new features for the OG Snapchat app, its hardware, and its partnerships – including deals with YouTube and Unity Software, and an exciting deal with Walt Disney that will allow people to interact with augmented reality objects at Disney World.
Snap is clearly betting big on the whole augmented reality thing, also introducing new AR glasses and new app features that let you play around with the interactive experience – for anyone whose not entirely sure what augmented reality is all about, think Pokemon Go vibes, with computer-generated objects laid into an interactive real world environment. The company is hoping that investing in the AR scene will help it to capitalize on the e-commerce boom that’s taken over since COVID kept shoppers at home, with a lot of people turning to experiences that used AR to let you “try on” clothes or beauty products. Other big name companies have been getting involved too, with Facebook and TikTok introducing new AR features and investments, so it’s good to see Snap keeping up with the competition.