Snap shares jump as it smashes user and revenue targets
Shares in Snap have soared in after-hours trading after the social media group smashed forecasts for its user numbers and revenue in the second quarter.
The California-based owner of Snapchat saw its shares jump more than 17 per cent after markets closed as it booked its highest growth rates since late 2017.
Daily active users rose by 23 per cent to hit 293m in the three months to the end of June, beating analyst estimates and above its previous record for quarterly user growth.
Revenue jumped 116 per cent to $982m (£715m), which was also above forecasts and a new record.
Snapchat, which is best known for its disappearing messaging feature, has expanded into five parts spanning media content and short-form viral video clips.
The social media company spurred on growth during the pandemic by promoting more direct ad formats, such as a feature that allows users to swipe up on a mobile ad to go to the brand’s website.
It has also invested heavily in augmented reality technology for functions such as helping users virtually try on makeup or clothes.
Snap forecast third-quarter revenue between $1.07bn and $1.09bn, and it expects daily active users to grow 21 per cent to 301m, both ahead of expectations.
Yuval Ben-Itzhak, chief of strategy at Emplifi, said: “2021 is proving to be a stellar year for Snap as the platform goes from strength to strength.
“The focus Snap has put on its content and distribution, as well as its investment in social commerce, seems to be reaping rewards.
“Content is still king, and we’ve seen Snap investing heavily in its content strategy, from its partnership with Channel 4 in the UK, which will bring more than 300 short-form edits of Channel 4 shows, to Snapchat’s Discover platform, through to its TikTok rival, Spotlight. Snap is doubling down on enabling users to create and share compelling content, which in turn, increases the amount of time users spend on the platform.”