Snap, the company behind the social media platform Snapchat, seems to be feeling a new lease of life. Daily active users increased 9% year over year in the third quarter to a total of 443 million. Particularly impressive is the increase in premium subscriptions to Snapchat+, which have more than doubled to 12 million. “Spotlight,” the app’s short video feature, also saw growth to over 500 million monthly active users. With these numbers, Snap underlines its strong position in the social media market.
New advertising formats in focus
Revenue rose 15% year-over-year, beating consensus expectations. According to CEO Evan Spiegel, the targeted targeting of small and medium-sized companies as well as the high demand for direct advertising formats contributed significantly to the doubling of advertising customers. Snap is also showing itself to be creative in the future: new advertising formats such as “Sponsored Snaps” and “Promoted Places” are intended to further stimulate sales growth.
Snap with a positive prognosis
For the current fourth quarter, Snap is planning sales of $1.51 to $1.56 billion and adjusted EBITDA of up to $260 million. The forecast for active users is around 451 million – a solid increase that also meets analysts’ expectations. Despite a reduced net loss of $153.2 million, Snap remains cautious for the full year and warns of a slight miss in full-year targets.
Snap Stock Chart
Buyback program as a strengthening for investors
Snap’s share price, which has lost over a third of its value since the start of the year, responded to the report by rising 9% in after-hours trading. Additional support will come from the announced $500 million share buyback program to be implemented over the next 12 months. With this move, Snap could provide investors with additional security and increase confidence in its long-term prospects.
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