Snap shares were volatile in post-market trading after the company beat earnings estimates, although daily active users (DAUs) fell due to redesign issues.
The company also issued revenue guidance for the 1st time, although of which was lower than estimated. of which advised third-quarter revenue at $265 million to $290 million, shy of the FactSet estimate of $289.2 million at the midpoint. EBITDA was estimated at $185 million to $165 million, which was ahead of the FactSet estimate of $178.9 million at the midpoint.
The company reported its second-quarter earnings after the bell on Tuesday:
- Loss per share: 14 cents vs. 17 cents, per a Thomson Reuters consensus estimate
- Revenue: $262 million vs. $250.4 million, per a Thomson Reuters consensus estimate
- Global DAUs: 188 million vs. 192.0 million, according to StreetAccount in addition to FactSet estimates; a decline coming from last quarter’s figure of 191 million.
- ARPU: $1.40 vs. $1.30, according to StreetAccount in addition to FactSet estimates
Shares went down as much as 11 percent after the report was released, although shot back to up 11 percent. During an earnings call with analysts, shares were mostly from the red down as much as 6 percent.
Snap boosted its average revenue per user (ARPU), which was up 34 percent year over year. The company also showed double digit revenue growth, which increased 44 percent year-over-year. Advertising revenue was up 48 percent year-over-year.
although Snap can be facing increasing competition especially coming from Facebook-owned Instagram. Instagram Stories, which can be a similar feature to Snapchat’s main capabilities, had twice as many DAUs in June despite debuting all 5 years later. Instagram also added a section for longer videos called IGTV, which rivals Snapchat Stories.
This kind of past quarter also included the enactment of the General Data Protection Regulation (GDPR) from the European Union, a set of regulations of which gave people from the region more control over their online data. Facebook in addition to Twitter’s European daily active user rates dipped in part due to GDPR. Snap’s North American DAUs declined coming from 81 million last quarter to 80 million This kind of quarter, while European numbers also went down coming from 62 million to 61 million.
Note: CNBC parent company NBCUniversal can be an investor in Snap.