Snap jumps 25% in the stock market on a stronger than expected Q3 earnings report
- Snap jumps 25% in the stock market on a stronger than expected Q3 earnings report.
- The social media company reports £153.39 million of net loss in the third quarter.
- The Santa Monica-based company turns to a surprise adjusted profit of 0.77 per share.
Snap Inc. (NYSE: SNAP) published its financial results on Tuesday that blew past Wall Street estimates for the fiscal third quarter. The company said its daily active users (DAUs) jumped to 249 million in Q3, versus 238 million in the prior quarter. FactSet Consensus for the quarter over quarter increase in DAUs stood at a much lower 5 million.
Shares of the company jumped close to 25% in after-hours trading on Tuesday. Including the price action, Snap is now exchanging hands at £27 per share after recovering from a year to date low of £8.37 per share in March, when the impact of COVID-19 was at its peak. Confused about choosing a reliable stockbroker to trade online? Here’s a comparison of the top few to make selection easier for you.
Snap’s Q3 financial results versus analysts’ estimates
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Snap said that it generated £520.76 million of revenue in the third quarter versus the year-ago figure of £342.06 million. According to FactSet, analysts had anticipated £427.19 million of revenue for the social media company in Q3. Snap introduced a new Sounds function recently that enables users to add music to their video clips.
Chief Business Officer of Snap Inc., Jeremi Gorman commented on the earnings report on Tuesday and said:
“As businesses adapted and began to look for opportunities to increase their marketing budgets in Q3, we were pleased to see existing advertisers resume and even increase their budgets, as well as new advertisers allocate spend to drive real business value via our self-serve ad platform.”
Snap reports £153.39 million of net loss in the third quarter
The Santa Monica-based company reported £153.39 million of net loss in the recent quarter that translates to 10.74 pence per share. In the comparable quarter of last year, its loss had come in at a higher £174.10 million or 12.27 pence per share. In the prior quarter (Q2), Snap’s net loss had jumped 28% on an annualised basis.
But on an adjusted basis, Snap earned 0.77 pence per share in the fiscal third quarter versus 3.83 pence of per-share loss expected, as per FactSet. The U.S. company had posted 3.07 pence of adjusted loss per share in the same quarter last year.
Snap performed aggressively hawkish in the stock market last year with an annual gain of roughly 200%. At the time of writing, the American social media company has a market cap of £32 billion.