Snap shares surge after Q2 revenue beats expectations
What's the story
Snap Inc has reported better-than-expected revenue and earnings for the second quarter. The company's stock jumped nearly 8% in extended trading following the news. Snap's Q2 revenue rose 19% year-on-year to $1.6 billion, beating analysts' expectations of $1.54 billion. The company's net loss also narrowed from $262.6 million last year to $164 million this year.
Financial performance
Snap's adjusted earnings for the 2nd quarter surpass expectations
Snap's adjusted earnings for the second quarter stood at $250 million, surpassing StreetAccount's estimate of $192 million.
The company also reported a global daily active user base of 493 million, exceeding the expected 487 million.
The global average revenue per user (ARPU) was $3.25, higher than the anticipated $3.16 according to StreetAccount data.
Future outlook
Snap's Q3 earnings forecast
For the third quarter, Snap expects sales to be between $1.7 billion and $1.74 billion.
The company's adjusted earnings are projected to be between $300 million and $350 million for this period.
Snap's CEO Evan Spiegel credited better performance with large advertisers in North America and stronger international revenue growth to improved ad products and go-to-market strategies.
The company also benefited from spending related to the World Cup event.
Cost projection
Snap raises full-year infrastructure costs guidance
Snap has raised its full-year infrastructure costs guidance by $50 million to between $1.65 billion and $1.7 billion.
The company said this increase accounts for "additional investment in the AI and machine learning infrastructure needed to support revenue growth."
Snap's other revenue category, which includes the Snapchat+ subscription service, grew 85% year-on-year to $316 million in Q2.