By Sheila Dang
(Reuters) – Snap Inc
Shares of Snap rose 18% to $33.85 in after-hours trading.
Daily active users (DAUs), a widely watched metric by investors and advertisers, rose 18% year-over-year to 249 million in the quarter ended Sept. 30, the company said in a statement. Analysts had expected 244 million, according to IBES data from Refinitiv.
The company said it expected continued momentum in user growth and forecast about 257 million daily active users in the fourth quarter, exceeding analysts’ current estimate of 249.81 million.
Revenue, which Snap earns mainly from selling ads on the app, jumped 52% to $679 million, widely beating analysts’ consensus estimate of $555.9 million.
Snap has positioned itself as a safe place for brands to advertise because it focuses on one-on-one messages which disappear once they are read.
That reputation served Snap well in the third quarter, when over 1,000 advertisers boycotted larger rival Facebook Inc
It opened an opportunity for Snap as companies reviewed their ad spending, and helped contribute to revenue growth, said Jeremi Gorman, Snap’s chief business officer, in prepared remarks for an earnings call with analysts.
Average revenue per user was $2.73, up 28% from the year-go quarter.
Snap’s net loss narrowed to $199.8 million, or 14 cents per share, from $227.37 million, or 16 cents per share, a year earlier.
Snap said current-quarter revenue could grow between 47% to 50% over the year-ago period, but cautioned that it was unclear how the pandemic would affect year-end holiday advertising.
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(Reporting by Sheila Dang; Editing by Richard Chang)
