Social media company Snap Inc (NYSE:SNAP) saw its share scale historic jump last Thursday after it managed to beat earnings estimates comfortably. After the declaration of earnings results, the Snap stock rallied last week and went up as much as 30%. The stock could remain in focus this week as well and hence, it may be worthwhile for investors to have a closer look at Snap.
Q3 Earnings Beat
The Snap stock has performed admirably in 2020 and up until last week, it has gained as much as 70% this year so far. The latest rally came about after the social media company generated revenues of $679 million Q3 2020 and beat analysts’ estimate of $555 million in a canter.
That reflects a year on year rise of as much as 52%. More importantly, Snap managed to actually generate an adjusted profit of 1 cent a share and that came as an unexpected surprise for market watchers as well.
The company also announced that the active daily users stood at 249 million, which reflects a rise of 18% year on year. It was also higher than the estimated range of 242 million to 244 million from analysts as well as the company’s own projection of 243 million.
Net losses came in at $200 million, which was a significant drop from the $227 million net loss in the prior-year quarter.
Facebook’s Loss Snap’s Gain
One of the major reasons behind the substantial rise in revenues was due to Snap’s success in taking advantage of the ad boycott on Facebook.
Facebook has long been one of the major platforms for advertising but in excess of 1000 advertisers ditched the platform as part of the ‘StopHateForProfit’ campaign. Snap used the opportunity to pitch its services to such advertisers who had ditched Facebook.
Projections for Fourth Quarter
$AABB – Asia Broadband Inc. Why investing in gold is a certainty Snap also provided their projection for the fourth quarter and that is something that potential investors could take note of. Snap expects its revenues for the fourth quarter to rise by 47% to 50% year on year. On the other hand, the company has projected daily active users country to rise to 257 million.
That being said, the company also informed us that it expects its expenses to rise in the fourth quarter as well. Despite the overall uncertainty in the global economy, the company is optimistic about its prospects for the long term.
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