Snapchat gains 11m users worldwide

• Published On: 30 October 2024 at 17:31

Snap Inc. reported strong quarterly results on Tuesday, exceeding Wall Street's expectations for revenue and user growth.

Snapchat's parent company has successfully re-attracted advertisers to its platform by improving its advertising features. In addition to its positive earnings report, Snap announced a $500 million share repurchase program.

Following the announcement, Snap's shares fell 8% in after-hours trading before rebounding to gain 10%, reaching $12.

Snap, headquartered in Santa Monica, California, has faced ongoing competition from major players such as Meta Platforms, which owns Facebook and Instagram. Snap has strengthened its position by investing in machine learning technologies to improve ad targeting and making it easier for small and medium-sized businesses to advertise on Snapchat.

Snap's revenue in the third quarter ended September 30 increased by 15% year on year to $1.37 billion, exceeding the average analyst estimate of $1.36 billion.

Snap expects fourth-quarter revenue of $1.51 billion to $1.56 billion, in line with Wall Street expectations, especially during the critical holiday shopping season, when advertising spending typically peaks.

The company acknowledged that demand from large advertisers has been lower in recent months, but two new ad formats are expected to increase interest. One of these formats enables businesses to promote their offerings on Snap Maps.

CEO Evan Spiegel stated, "We're seeing brands try to drive people back into their stores and establishments. The feedback has been excellent."

Snapchat also experienced a 9% year-over-year increase in daily active users, reaching 443 million, exceeding analyst expectations of 441 million. Snap recently began rolling out a redesign of its app, which reduced it from five to three sections in order to increase user engagement.

Early tests show that this change has successfully attracted previously inactive users to the platform.

The company reported adjusted earnings per share of 8 cents in the third quarter, exceeding Wall Street's estimate of 5 cents.