Snapchat Beats Third-Quarter Expectations But Provides Weaker Guidance
Topline: Snap, the maker of Snapchat, reported strong third-quarter earnings on Tuesday that exceeded Wall Street expectations for user growth and revenue, while at the same time predicting slightly weaker revenue for the final months of the year.
- Revenue grew to $446 million-up almost 50% year over year, beating out the $435 million forecast by Refinitiv.
- Snapchat grew its base to 210 million daily active users-the third quarter in a row that number has grown, rebounding from a shrinking user base last year.
- Snap also posted smaller-than-expected losses, of 4 cents a share compared with the expected loss of 5 cents a share.
- Snap stock, which at one point had risen over 200% for the year, fell somewhat after the company slightly reduced revenue expectations for the fourth quarter; shares are down 11% for the day, although post-earnings trading has been mixed.
- Snap CEO Evan Spiegel did say, however, that the company could break even in the fourth quarter-which would see it become profitable for the first time.
Key background: After its stock market debut two years ago floundered, Snapchat has made a strong comeback, with strong earnings in recent quarters (fewer losses than Wall Street had expected), new revenue opportunities and improved profitability all helping drive shares higher this year. The stock is up almost 150% in 2019, outpacing the broader market and eclipsing its peers in the technology sector.
Crucial quote: "We are excited about executing on the many opportunities in front of us," Spiegel said in a statement.
Crucial statistic: Snapchat's big rally in 2019 has rebounded the stock back within range of its 2017 IPO price of $17 per share. It currently trades near $14 a share, up from its low of $5 last December.
I am a New York-based reporter for Forbes, covering breaking news-with a focus on financial topics. Previously, I've reported at Money Magazine, The Villager NYC, and T
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