Snap Tops Revenue Forecast Thanks To World Cup Ad Spend
Synopsis
The social media company beat quarterly revenue estimates as FIFA World Cup advertising and stronger spending from major brands boosted its ad business.
Key Highlights
- Snap beat second-quarter revenue expectations, helped by stronger advertising spending during the FIFA World Cup.
- Revenue climbed 19% to US$1.60 billion, ahead of analysts’ forecast of US$1.54 billion.
- Snap shares jumped 13% in extended trading.
Snap reported better-than-expected second-quarter revenue on Monday, boosted by increased advertising spending tied to the FIFA World Cup and stronger campaign activity from major advertisers across North America.
The results sent the social media company’s shares up 13% in extended trading.
CEO Evan Spiegel said improvements to Snap’s advertising products and its go-to-market strategy helped strengthen relationships with large North American advertisers. He added that World Cup-related advertising also supported growth during the quarter, alongside continued demand from small and medium-sized businesses.
Revenue Beats Expectations
Snap has continued expanding its direct-response advertising business while enhancing its platform with AI-powered tools for automated bidding, budgeting and audience targeting.
The company posted second-quarter revenue of US$1.60 billion, up 19% from a year earlier and above analysts’ estimate of US$1.54 billion, according to LSEG data.
Daily active users increased 5% year-on-year to 493 million in the three months ended June 30, matching the growth pace seen over the previous two quarters. However, daily active users fell nearly 7% in North America and around 2% in Europe.
Snap said it continues to face intense competition from Meta, and its shares remain down about 37% this year.
Third-Quarter Outlook
For the third quarter, Snap expects revenue between US$1.70 billion and US$1.74 billion, with the midpoint slightly above analysts’ forecast of US$1.70 billion.
The company also expects adjusted EBITDA of between US$300 million and US$350 million, compared with analysts’ estimate of US$329.9 million. Snap said it is continuing to monitor changes in the legal and regulatory environment that could materially affect its business.
The company will share additional details about its augmented reality Specs glasses during a launch event in Los Angeles on September 16. Snap introduced the consumer version of the device in June with a price tag of US$2,195.
Source: Reuters
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