By Jaspreet Singh
Aug 3 (Reuters) – Snap beat second-quarter revenue estimates on Monday, thanks to increased advertising spending during the FIFA World Cup and stronger campaign activity from large advertisers in North America, sending its shares up 13% in extended trading.
The social media company is bolstering its appeal by focusing on direct-response ads and improving its ad platform by offering AI-powered tools for automated bidding, budgeting and user targeting.
“After several quarters of improving our ad products and go-to-market approach, we saw better momentum with large advertisers in North America,” CEO Evan Spiegel said. “The World Cup-related spending contributed during the quarter, alongside continued strength among small- and medium-sized businesses.”
Snap, however, continues to face intense competition from bigger rivals such as Meta, which owns Facebook and Instagram. Its shares have fallen around 37% this year.
The company’s daily active users increased about 5% to 493 million during the three months to June 30, maintaining the same pace of growth as in the prior two quarters.
It reported nearly a 7% decline in North America DAUs and about a 2% drop in Europe.
Second-quarter revenue jumped around 19% to $1.60 billion, while analysts estimated $1.54 billion, according to data compiled by LSEG.
Snap expects third-quarter revenue of $1.70 billion to $1.74 billion, with its midpoint slightly above the estimate of $1.70 billion. It forecast adjusted earnings before interest, taxes, depreciation and amortization of $300 million to $350 million, compared with the estimate of $329.9 million.
Snap said it continues to monitor the evolving legal and regulatory landscape that could materially impact its business.
The company will share more details about its augmented-reality glasses, Specs, at the launch event in Los Angeles on September 16. It had unveiled the device for consumers at a hefty price of $2,195 in June.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Shilpi Majumdar)
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