Snap Stock Soars 20% To New All-Time High On Earnings Beat And Massive User Growth

Shares of Los Angeles-based social media firm Snap Inc., the parent of the Snapchat app, are skyrocketing up 20% after a third-quarter earnings report revealed explosive growth amid the coronavirus pandemic.

Key Facts

Snap nabbed revenues of about $679 million in the quarter–52% more than in the same period a year ago and far above Wall Street expectations calling for $550 million.

The firm’s third-quarter net loss of $200 million was 12% lower than the loss last year, and the firm’s adjusted earnings of 1 cent per share also blew past analyst forecasts averaging a loss of 5 cents per share. 

Snap shares were surging about 20% in after-market trading within minutes of the announcement, reaching new all-time highs and eclipsing levels not seen since the firm went public in March 2017.

Hovering at close to $34, shares of Snap are close to doubling this year, up 97% in 2020 as of press time; the S&P 500, meanwhile, is up about 7% this year.

The firm’s daily active users jumped 18% year over year to 249 million, and the number of “snaps,” or photo and video messages, sent each day also nabbed double-digit percentage growth, jumping 25% year over year.

Crucial Quote 

“Our focus on delivering value for our community and advertising partners is yielding positive results during this challenging time,” said the firm’s 30-year-old billionaire CEO, Evan Spiegel, in a statement released alongside earnings. “The adoption of augmented reality is happening faster than we had previously anticipated, and we are working together as a team to execute on the many opportunities in front of us.”

Key Background

Founded by Stanford classmates Spiegel and Bobby Murphy, Snap raised roughly $3.4 billion with its monster public market debut in March 2017 and saw shares close more than 40% higher than their offering price of $17. Investor sentiment quickly waned, however, as worse-than-expected losses piled on. The price of Snap shares fell as low as $5 in December 2018 and didn’t reach IPO levels again until this January after a steady ascent as the firm beat on earnings and user growth quarter after quarter. The Tuesday results are the firm’s best third-quarter showing for both revenue and user growth since 2017, Spiegel said in a post-earnings conference call.

Big Number

75%. That’s the percentage of Gen Z and Millennial consumers Snap says it now reaches in key markets like the United States, United Kingdom and France.

Further Reading

Stocks Tick Up, Dow Climbs 150 Points, As Stimulus Negotiations Look To Drag On Past Deadline (Forbes)

AMC Shares Plummet 13% As It Attempts To Raise More Cash To Avoid Chapter 11 Bankruptcy (Forbes) Follow me on Twitter. Send me a secure tip

Jonathan Ponciano

Jonathan Ponciano

I’m a reporter at Forbes focusing on markets and finance. I graduated from the University of North Carolina at Chapel Hill, where I double-majored in business journalism and economics while working for UNC’s Kenan-Flagler Business School as a marketing and communications assistant. Before Forbes, I spent a summer reporting on the L.A. private sector for Los Angeles Business Journal and wrote about publicly traded North Carolina companies for NC Business News Wire. Reach out at jponciano@forbes.com.

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