Today, all eyes are on Snap (NYSE: SNAP) stock, which surged approximately 28% in intraday trading on Friday. This significant boost came after the company posted better-than-expected first-quarter earnings and issued an upbeat revenue guidance for the second quarter.
Snap Inc. (SNAP), the parent company of Snapchat, released a first-quarter earnings report last week that beat expectations, showcasing a 21% increase in sales.
The Santa Monica-based social media company disclosed adjusted earnings of 3 cents per share on revenue of $1.2 billion for the quarter ending in March. According to FactSet, analysts had expected sales of $1.12 billion and an adjusted loss of 5 cents per share.
Snap forecasted sales of $1.24 billion at the midpoint of its range, beating analysts’ estimates of $1.22 billion for the quarter ending in June, as per FactSet.
Snap Revenue Accelerates Big-Time
The first-quarter results mark a substantial acceleration in revenue growth for Snap, with sales increasing by 21% year over year. This growth represents a notable rebound from the previous quarters, where Snap experienced more modest revenue increases of 5%. The company achieved its highest revenue growth rate in two years in the March quarter.
In a letter to shareholders, Snap executives expressed optimism about revenue growth, noting that it is “improving faster than we had previously anticipated.”
The company attributed this improvement to enhancements in its advertising platform and increased demand for direct-response advertising, which aims to prompt a specific user response, such as clicking on a product page for an e-commerce business.
Snap also highlighted the success of Snapchat+, its subscription product offering exclusive app features for $3.99/month. The company reported a significant increase in paying users, with subscriptions tripling year-over-year to 9 million.
Moreover, Snapchat saw a 10% year-over-year increase in daily active users, reaching 422 million. Snap expects further user growth, expecting to reach 431 million users by the end of June.
Snap’s sales guidance for the June quarter indicates a potential 16% increase from the previous year. However, company officials cautioned in a shareholder letter that the current quarter presents a more challenging year-over-year comparison and other seasonal factors.
Snap (NYSE: SNAP) Stock Movement
At the time of this report, SNAP stock stands at $14.48, indicating a 0.48% decrease from the previous trading session. It is down 14.06% year-to-date.
NYSE: SNAP SNAP SNAP shares Snap stock SNAP stock news
