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.
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.
“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.”
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.
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.
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