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Snap crushes earnings expectations as revenue more than doubles

Snap Inc. saw revenue more than double in the latest quarter, easily topping expectations amid a continued rebound in the advertising market.

Shares were up 13% in after-hours trading after the company posted second-quarter revenue of $982 million, up from $454 million a year earlier and vastly ahead of the $846 million that analysts tracked by FactSet had been projecting.

The social-media company added 13 million daily average users sequentially in the period, bringing its total to 293 million. The FactSet consensus called for 10 million net additions.

Snap
SNAP,
-0.66%

cut its losses in half, posting a net loss of $151.6 million, or 10 cents a share, compared with a loss of $326.0 million, or 23 cents a share, a year earlier.

After adjusting for stock-based compensation and other expenses, Snap surprised with positive earnings per share of 10 cents, whereas it posted a 9-cent loss per share a year earlier. Analysts tracked by FactSet were expecting a 1-cent adjusted loss per share.

“Our second-quarter results reflect the broad-based strength of our business, as we grew both revenue and daily active users at the highest rates we have achieved in the past four years,” Chief Executive Evan Spiegel said in a statement.

Social-media peer Twitter Inc.
TWTR,
+0.04%

also posted upbeat results Thursday afternoon and its shares were up 8% in after-hours trading.

The earnings come amid a busy year for Snap, which has seen its stock rise 25% so far in 2021 as the S&P 500
SPX,
+0.20%

has gained 16%. The company has been capitalizing on a resurgence in the advertising market, especially relative to a more muted landscape in the early days of the pandemic. It has also built up features beyond messaging, which can bring in more revenue.

Snap has been trying to dive deeper into the world of commerce and announced earlier this week that it struck a partnership with Verishop that will use augmented reality to help consumers explore different fashions. Snap made several shopping-related acquisitions earlier in the year.

For the current quarter, Snap expects $1.070 billion to $1.085 billion in revenue. The FactSet consensus was for $1.014 billion.

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