Snap soars 17% after a stunning Q2 earnings beat, while Twitter jumps 5%
Steve Jennings/Getty Images for TechCrunch/Lucas Jackson/Reuters
- Shares in Snap and Twitter jumped on Friday after both companies beat Q2 analyst forecasts.
- Snap's revenue came in at nearly $1 billion, compared to analyst expectations of $846 million.
- Twitter reported a 74% jump in revenue to $1.19 billion, higher than the expected $1.07 billion.
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Snap and Twitter's shares rose in pre-market trading on Friday after the social media sites reported second-quarter earnings that beat analyst expectations.
Snapchat's parent popped more than 17% after posting a jump in daily active users to 293 million in the quarter, which is about 23% higher than the 238 million daily users reported a year earlier. That beat the 290.3 million expectation of analysts polled by StreetAccount.
Revenue for the quarter more than doubled to $982 million, compared to the $846 million expectation of analysts polled by Refinitiv.
Snap's net loss shrank 53% to $152 million, compared to its $326 million loss a year ago.
Twitter also had a solid quarter, reporting a 74% jump in revenue to $1.19 billion, which is its fastest rate of topline growth since 2014. Analysts polled by Refinitiv expected quarterly revenue of $1.07 billion.
The company's stock rose 5% in pre-market trading.
Twitter is in a strong position, and according to its forecasts, market conditions seem to have improved to the point where it can thrive, Pearse Carson, an analyst at multi-asset investment platform eToro, said.
Its number of monetizable daily active users, or those able to view ads on the platform, rose by 11% to 206 million, Twitter said. Analysts polled by StreetAccount expected 206.2 million.
Advertising revenue rose 87% year-on-year to $1.05 billion.
The company expects third-quarter revenue of as much as $1.3 billion.
Investments made to overhaul its advertising offering is expected to increase costs by 30% for the year, but that could be offset by revenue growth, Carson said.
In the second-quarter, Twitter launched its first subscription product that allows users to undo tweets. "Twitter Blue," which costs $2.99 a month, gives users up to 30 seconds to undo or edit a tweet before it's posted.
CEO Jack Dorsey said at "The B Word" event on Wednesday that if cryptocurrencies were around when Twitter started, it may not have needed to rely on advertising at all.
"If we had bitcoin or native currency before Twitter started, it just creates so many business models that we wouldn't have to be dependent upon advertising generally," he said, in response to a question from Elon Musk.
Snap stock is up 25% so far this year, while Twitter is trading 28% higher in the same period.