It’s a great comeback after a tough 2018…
Snap, Snapchat’s parent company, released its Q2 2019 financial results yesterday, and the results were surprising.
The news sparked a 12% bump in Snap’s share prices after closing.
2018 was a rough year for Snap. On December 21, the company’s shares dropped to $4.99 — a record low. Since then, Snap has bounced back with share prices increasing by more than 180%.
Thanks to narrow losses and higher-than-expected user growth and revenue, Snap stock seems to be on the upswing.
A Look at the Numbers
Snap’s Q2 2019 financials have surpassed Wall Street’s expectations. Here are the key numbers from the announcement:
- Daily Active Users — 203 million vs. a 192.4 million forecast from FactSet
- Loss Per Share — 6 cents vs. a 10-cent loss from Refinitiv
- Revenue — $388 million vs. a $359.7 million forecast from Refinitiv
These figures caused Snap’s share price to rise to over $16.50 after the market close — the highest in more than a year.
In a statement regarding this report, Snap CFO Dereck Andersen said, “We continue to make significant progress in driving down our underlying unit costs over time, including the cost to deliver a Snap, the cost to deliver an impression, and other key drivers of infrastructure costs.”
Much of this success comes from Snapchat’s augmented reality lens feature, which has produced several viral sensations for the company, including the puppy face and gender swap lenses.
Snap’s efforts to continue to add features like this have allowed the social media company to compete with the likes of Facebook and Instagram.
Things Are Looking Up for Snap
Snapchat has made concerted efforts to appeal to its young user base … and it seems to be paying off.
Snap CEO Evan Spiegel said, “Today, more than 75 percent of the 13–34-year-old population in the United States is active on Snapchat, making us larger than services like Facebook and Instagram among this audience.”
Monetization has always been one of the company’s biggest struggles. But, as popular features like Lenses continue to increase engagement, more advertisers are flocking to the platform.
If Snap can continue to increase user growth and replicate the success of Lenses, the company’s Q3 earnings could potentially be even more impressive than its Q2 financial results.
