Snap Inc (NYSE:SNAP) shares surged in after-hours trade in New York after the group beat analyst expectations for the third quarter as daily active users of its Snapchat app continued to rise and demand was strong for its video filters and streamed content.
By the end of September Snapchat’s daily active users were up 4% on the second quarter and 18% higher than a year ago to 249mln, which compares well to Twitter’s recent 186mln figure and 100mln for TikTok, though remains dwarfed by Instagram’s 500mln or so daily users.
The rise in daily users helped boost revenue, which at US$679mln for the quarter was up 52% on the same period last year and miles ahead of Wall Street’s consensus forecast of US$555mln.
Net losses of US$200mln compared to US$227mln a year ago, while underlying earnings (EBITDA) came in at US$56mln compared to a loss of US$42mln this time last year.
The US tech group said time spent by Snapchat users watching bite-sized videos of news, sports, scripted and unscripted shows increased by more than 50% year-over-year in the quarter.
Snapchatters also liked its new products such as a ‘lens’ that transforms your face using augmented reality (AR) tech into the style of a Japanese Anime character – which was used more than 3bn times in its first week, while there was also demand for shows from actor Jaden Smith, fighter Connor McGregor and comedian Kevin Hart.
“Our focus on delivering value for our community and advertising partners is yielding positive results during this challenging time,” said Snap CEO Evan Spiegel in the earnings statement.
“We’re excited about the growth of our business in Q3 as we continue to make long-term investments in our future. The adoption of augmented reality is happening faster than we had previously anticipated, and we are working together as a team to execute on the many opportunities in front of us.”