Snap beats revenue estimates on ad boost from World Cup
Snapchat logo is seen in this illustration taken July 28, 2022. REUTERS/Dado Ruvic/Illustration
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Aug 3 : Snap beat Wall Street estimate for second-quarter revenue on Monday, thanks to increased advertising spending during the FIFA World Cup and stronger campaign activity from large advertisers in North America.
The social media company’s shares jumped 9 per cent in extended trading.
Snap’s focus on direct response ads, designed to prompt specific actions such as app downloads or website visits, is helping it attract advertisers in a crowded market, where bigger rivals such as Meta Platforms is offering AI-powered tools for better user targeting.
The Snapchat parent provides Smart Campaign Solutions, its AI-powered suite of ad tools that automate bidding, budgeting and audience targeting, allowing advertisers to improve results more efficiently.
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“After several quarters of improving our ad products and go-to-market approach, we saw better momentum with large advertisers in North America,” CEO Evan Spiegel said. “The World Cup-related spending contributed during the quarter, alongside continued strength among small- and medium-sized businesses.”
Its daily active users increased about 5 per cent to 493 million during the three months to June 30, maintaining the same pace of growth as in the prior two quarters.
Snap reported nearly a 7 per cent decline in North America DAUs and about a 2 per cent drop in Europe, mirroring the performance recorded in its two largest revenue-generating regions in the prior quarter.
Second-quarter revenue jumped around 19 per cent to $1.60 billion, while analysts estimated $1.54 billion, according to data compiled by LSEG. Growing Snapchat+ subscriptions also benefited the company.
Snap expects third-quarter revenue of $1.70 billion to $1.74 billion, with its midpoint slightly above the estimate of $1.70 billion. It forecast adjusted earnings before interest, taxes, depreciation, and amortization of $300 million and $350 million, compared with the estimate of $329.9 million.
The company said it continues to monitor the evolving legal and regulatory landscape in the U.S. and internationally that could materially impact its business, including increased scrutiny on youth-related issues.
Source: Reuters
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