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Snapchat’s Q3 2019 Earnings Beat Estimates, Revenue Shoots 50% YoY

Snap Inc., the parent company of multimedia messaging app Snapchat has delivered a strong performance in Q3 2019 and beats analysts’ expectations. The company has seen a major uptick in its user-base and revenue while limiting its losses even below the expected value.

The net loss has decreased to $227 million from $255 million in Q2 2019 while it has decreased nearly $100 million QoQ. Last quarter, Snapchat added 7 million daily active users taking the total tally to 210 million. There is a 13% surge in daily active years year-over-year.

Besides, the company has also seen a whopping 50% surge in revenue year-over-year. In Q3 2019, Snap Inc. registered a revenue of $446 million with an average revenue per user going at $2.12.

Despite the strong numbers, Snap Inc’s stock closed 4% lower at $14.00 per share. The stock price is currently trading below its IPO value of $17. This negative tendency has been observed for a couple of weeks already.

However, Snapchat CEO Evan Spiegel is confident that the share price will go up. In a statement, Spiegel said:

“We are a high growth business, with strong operating leverage, a clear path to profitability, a distinct vision for the future, and the ability to invest over the long term. We are excited about executing on the many opportunities in front of us.”

Spiegel also added that Snapchat stories feature continued to grow despite strong competition from rivals like Instagram. He noted: “We benefited from year-over-year growth in user activity in Q3 including growth in Snapchatters posting and viewing Stories.”

He added that the stories’ view is critical to the total ad view on Snapchat. He also expects the metrics to improve from here.

Riding on the recent wave, the company is expecting strong numbers for the last quarter of 2019. The company said that its revenue is likely to surge past $540 million in Q4 2019. Besides, the company also adds that sales in the Q4 2019 would jump 41% year-over-year.

Snap Chief Financial Officer Derek Andersen said that the company has given this Q4 forecast considering one less week in the peak demand period i.e. between Black Friday and the end of the holiday season. Andersen told analysts:

“The way the calendar falls this year there’s one fewer week of activity between those two holidays. That’s a potential headwind for us, and the guide reflects that.”

Speaking on the rising competition from social video-sharing app TikTok, Spiegel said that they see them as a friend. He said that both these apps focus on different segments. He even showed a willingness to work together.

“The value they provide their community is very different than the value we provide ours to really empower communications with real friends. We’re excited to continue deepening that partnership and continue working together,” said Spiegel.

Snapchat’s Q3 2019 Earnings Beat Estimates, Revenue Shoots 50% YoY

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