Snap Inc. Beats Q3 Estimates As Snapchat Discover Comes Into Its Own
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Snapchat parent Snap Inc. has continued to gain momentum after stumbling badly in 2018, posting third-quarter results that exceeded Wall Street estimates for revenue and new subscribers.
Total revenue of $446 million in the period rose 50% from the same quarter a year ago and beat analysts’ consensus forecast by more than $11 million. The social network gained seven million new daily active users, reaching 210 million DAUS, up from 203 million in the second quarter and 186 million in the third quarter of 2018.
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On a diluted basis, net losses of four cents a share also topped Wall Street’s expectation of five cents.
Discover programming on Snapchat has continued to gain traction with the platform’s coveted young audiences. Daily Discover viewing time increased 40% in the quarter over last year, and in the period more than 100 Discover channels reached a monthly audience of 10 million viewers or more, the company said. Original horror thriller Dead of Night has reached more than 14 million unique viewers since its premiere in September, the company said.
CEO Evan Spiegel, who co-founded Snap in 2011, said in an investor letter that the company is on a path to profitability by the fourth quarter. Adjusted earnings before interest, depreciation, taxes and amortization (EBITDA) is expected to be between break-even and $20 million, compared with a loss of 50 million in the third quarter of 2018.
“We are pleased that the investments we have made are continuing to drive the growth of our community and our business,” 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.”
The company’s stock price has rebounded from its worrisome levels in the $5 range last winter to nearly triple in 2019 to date. It finished Wednesday trading at $14.01, down 4%.
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