Snap beats revenue estimates on ad boost from World Cup, shares surge
Snapchat logo is seen in this illustration taken July 28, 2022. REUTERS/Dado Ruvic/Illustration
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Aug 3 : Snap beat second-quarter revenue estimates on Monday, thanks to increased advertising spending during the FIFA World Cup and stronger campaign activity from large advertisers in North America, sending its shares up 13 per cent in extended trading.
The social media company is bolstering its appeal by focusing on direct-response ads and improving its ad platform by offering AI-powered tools for automated bidding, budgeting and user targeting.
“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.”
Snap, however, continues to face intense competition from bigger rivals such as Meta, which owns Facebook and Instagram. Its shares have fallen around 37 per cent this year.
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The company’s 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.
It reported nearly a 7 per cent decline in North America DAUs and about a 2 per cent drop in Europe.
Second-quarter revenue jumped around 19 per cent to $1.60 billion, while analysts estimated $1.54 billion, according to data compiled by LSEG.
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 to $350 million, compared with the estimate of $329.9 million.
Snap said it continues to monitor the evolving legal and regulatory landscape that could materially impact its business.
The company will share more details about its augmented-reality glasses, Specs, at the launch event in Los Angeles on September 16. It had unveiled the device for consumers at a hefty price of $2,195 in June.
Source: Reuters
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