Snap Shares Plunge As Q2 Earnings, Outlook Disappoint

Shares of Snapchat parent Snap fell sharply after market as earnings for the June quarter fell short of Wall Street estimates.

Revenue of $1.24 billion was up 16% from the year earlier quarter, but below expectations. Losses narrowed to $249 million from $377 million.

Daily active users of 432 million were up 9%.

“Our community grew to reach more than 850 million monthly active users in Q2, with more than 11 million Snapchat+ subscribers,” said CEO Evan Spiegel. “We continued to scale our advertising platform with active advertisers more than doubling year-over-year. We are looking forward to hosting our upcoming Snap Partner Summit on September 17th, where we will announce new updates to our service.”

Snap is mostly ad driven and advertising revenue rose 10%. Brand-oriented advertising revenue declined 1% year-over-year, the company said, on weak demand from certain consumer discretionary verticals including retail, technology,

and entertainment, as well as the timing impact of holidays shifting out of Q2 in the current year.

Snap shares are volatile, they surged in March after first quarter numbers.

Execs are hosting a call at 5:30 ET.

In its release, the company also offered a peek into the current quarter: “As we enter Q3, we anticipate continued growth of our global community, and as a result, our Q3 guidance is built on the assumption that DAU will be approximately 441 million in Q3.

“We are focused on executing against our roadmap to deliver improvements to our advertising platform to drive strong performance for our advertising partners and accelerate topline growth. Our Q3 guidance range for revenue is $1,335 million to $1,375 million, implying year-over-year revenue growth of 12% to 16%. Given the revenue range above, and our investment plans for the quarter ahead, we estimate that Adjusted EBITDA will be between $70 million and $100 million in Q3.”

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