Advertisement Kovid-19 fears about softening in advertising market, Snapchat parent
Said advertisers have resumed their spending on the platform, and in some cases increased spending.
Results: Snap (ticker: SNAP) reported its second adjusted profit in the company’s life as a public company, exceeding Wall Street sales expectations by $ 100 million.
In prepared comments, Snap Chief Business Officer Jeremy Gorman attributed a 52% quarter-on-quarter increase in revenue to the company’s investments in its advertising platform, products and team. She said the company was seeing the beginning of a recovery from the company’s brand advertisers and continued to strength from the direct-response portion of its advertising business.
“We continue to invest heavily in ranking, optimization and measurement to deliver measurable ROI for our advertising partners,” Gorman said. “It was our investment in our self-service advertising platform and our ability to serve our customers during challenging times that allowed us to enter a record number of advertisers this quarter.”
Snap reported a third-quarter net loss of $ 199.9 million, amounting to 14 cents per share, compared with a net loss of $ 227.4 million, or 16 cents per share, in the year-ago period. Adjusted for stock indemnification, among other things, earnings amounted to a penny a share, with a loss of four cents a share a year earlier. Revenue increased to $ 678.7 million from $ 446.2 million.
In the third quarter, Snap paid employees $ 192 million in stock compensation, which is 28% of the company’s revenue.
Sell-side analysts had expected Snap to report an adjusted loss of five cents on sales of $ 559.2 million. Wall Street expected a GAAP net loss of 18 cents per share.
Snape’s comment on online advertising is a strong indication for investors as to what big rivals are likely to see.
(FB) earnings report in the coming weeks. They were up 1% and 2.7% respectively after hourly trading. Other social-media stocks are also advanced in prepaid trading, with
(TWTR) is growing 5.4% and
(PINS) receiving 7%.
JMP Securities analyst Ron Josey told Baron’s In a phone interview that Snap’s third-quarter earnings are evidence of a continued broad shift in advertising dollars. “I think all the advertising dollars that were historically allocated to TV, or to print or out of home, I think they’re accelerating online,” Josie said.
Snap also beat expectations for the number of members using the Snapchat platform daily, an increase of 18% to 249 million from a year earlier. Snap’s revenue per user was $ 2.73, with its North American members being the most valued, at $ 5.49 a user. Analysts had estimated that Snap would report daily active users of 244.57 million and average revenue per user of $ 2.30.
Josie said that he pays great attention to the busyness of users who, despite competition from Tickcock, Instagram and Facebook, continue to lead for the third consecutive quarter.
Snap CFO Derek Anderson said that if favorable conditions continue, the company expects revenue growth of 47% to 50% in the fourth quarter, and approximately 257 million daily active users. For Josie, beyond the ongoing advertising growth, the company’s initiatives around e-commerce are probably the most interesting to develop in 2021, as online commerce is more social.
Among analysts covering Snap, there is a 26 rate to buy the stock, 11 have a hold, and a three rate to sell the stock. The average target price is $ 27.88, meaning a 3% drop.
The stock closed down 0.7% at $ 28.45 on Tuesday. Snap stock reached several record highs in October, closing above $ 27.09, reaching more than five trading sessions shortly after its IPO in 2017. Snap’s shares almost doubled this year, while
The index rose 16%.
Write Max A. Cherney at [email protected]