A picture of the atmosphere during the 2023 Snap Partner Summit at Barker Hangar on April 19, 2023 in Santa Monica, California.
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break The company surprised Wall Street on Friday by reporting profits and reporting sales and user numbers that beat analysts’ expectations, sending its shares soaring 28%.
The stock rose $3.15 to close at $14.55, its biggest percentage gain since 2022.
According to LSEG, first-quarter revenue grew 21% to $1.19 billion from $989 million in the same period last year, exceeding analysts’ expectations for sales of $1.12 billion.
The company reported adjusted earnings of 3 cents per share, while analysts expected a loss of 5 cents. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was $46 million, while analysts expected a loss of $68 million.
Snap said adjusted EBITDA “exceeded our expectations,” driven primarily by operating expense discipline and accelerated revenue growth.
Snap has been working to rebuild its advertising business after the digital advertising market struggled in 2022. Revenue growth was primarily driven by improvements in its advertising platform and demand for its direct-response advertising solutions, the company said in its investor letter.
“I think from a broader perspective, we saw a stronger brand environment, which was evident in all of our regions in the first quarter,” Chief Financial Officer Derek Andersen said on the earnings call. was reflected.
User growth is also better than expected. According to StreetAccount, Snap’s daily active users (DAU) in the first quarter were 422 million, a 10% increase from the same period last year, exceeding analysts’ average estimate of 420 million.
In February this year, Snap announced that it would lay off 10% of its global workforce, approximately 500 employees. The company said on Thursday that headcount and personnel costs would “increase slightly” during the remainder of the year.
Advertising revenue in the first quarter was $1.11 billion. Snap’s “other revenue” category, driven primarily by Snapchat+ subscribers, reached $87 million, a 194% increase from the same period last year. Snap reported more than 9 million Snapchat+ subscribers during the period.
While Snap’s growth was its fastest since March 2022, it still lagged Meta, which reported better-than-expected first-quarter results on Wednesday, growing 27%. Meta’s stock price plummeted anyway after the company issued a loose forecast and spooked investors with its talk of long-term investments.
Snap expects second-quarter revenue to be between $1.23 billion and $1.26 billion, higher than analysts’ expectations of $1.22 billion, according to StreetAccount.
watch: Watch CNBC’s full interview with Snap CEO Evan Spiegel
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