Snapchat parent Snap Inc. soundly beat Wall Street’s second-quarter forecasts, reporting a loss of 6 cents a share and revenue of $388 million.
Wall Street analysts had expected a loss of 10 cents a share, which was narrower than the 14 cents in the red in the same quarter a year ago. Their revenue estimate was for a shade less than $360 million.
In addition to those financial metrics, the company added 13 million daily active users in the period, reaching 203 million. That gain is the biggest for the company since the second quarter of 2016, and compares with 190 million in the first quarter and 188 million in the second quarter of 2018.
The company has bounced back in 2019 after a touch-and-go 2018. Its stock price has reflected newfound optimism, closing Tuesday’s session at $14.84, up 5%. It rose another 7% in after-hours trading.
The stock is at roughly triple its level of last December, when several abrupt departures from the C-suite and questions about strategy and a long-problematic Android app design weighed down shares.
Hollywood and major media companies keep a close eye on Snap’s Discover platform, which has made a range of content partnership deals to help programmers reach elusive youth audiences.
In the second quarter, Snap said its audience watching Discover video every day grew more than 35% from the same quarter a year earlier. It said total daily time spent by users watching Discover increased by more than 60% on a year-over-year basis.
Co-founder and CEO Evan Spiegel emphasized Snap’s youth appeal in prepared remarks to investors posted along with the financial results. More than 75% of the 13-34 year-old population in the U.S. is active on Snapchat, making it larger than services like Facebook and Instagram for that demo, he noted.
Spiegel also said the “substantial product evolution” in 2018 has started to bear fruit. “This growth in our community, engagement, and revenue is the result of several transitions we completed over the past 18 months,” Spiegel said. “Early last year we redesigned our application to emphasize the importance of communicating with real friends and create a space for premium content. We rebuilt our Android application to reach a broader audience, built a self-serve advertising platform to reach more advertisers, and transitioned our leadership to support our growing team.”
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