Snapchat Parent Company Reports Strong Q3 Results, But Issues Cautious Q4 Guidance
Revenue Jumps 15% as Net Loss Narrows
Snap Inc., the parent company of Snapchat, reported better-than-expected third-quarter results on Tuesday, with revenue jumping 15% from a year earlier. The company’s net loss narrowed to $153 million, down from $368 million in the same quarter last year.
Q4 Guidance Comes in Light
Despite the strong Q3 results, Snap issued cautious guidance for the fourth quarter, with projected sales of between $1.51 billion and $1.56 billion. This falls short of analysts’ estimates, which had pegged Q4 sales at $1.56 billion.
Adjusted Earnings Beat Expectations
However, Snap’s adjusted earnings for the fourth quarter are expected to come in between $210 million and $260 million, beating analysts’ estimates of $230.7 million.
Stock Repurchase Program Announced
The company also announced a $500 million stock repurchase program, which is expected to boost shareholder value.
Snapchat+ Subscribers Hit 12 Million
Snap’s subscription service, Snapchat+, continues to gain traction, with the number of paying subscribers reaching 12 million, up from 11 million in August.
Investments in AI and AR Paying Off
According to CEO Evan Spiegel, the company’s investments in artificial intelligence (AI) and augmented reality (AR) are driving innovation across its advertising platform and powering new creative experiences for users.
Spectacles AR Glasses Debut
In September, Snap debuted the fifth generation of its Spectacles AR glasses, which allow developers to build AR apps for the glasses. The company is positioning itself as a leader in the AR space, with a focus on attracting developers to its platform.
Competition from Meta
However, Snap faces stiff competition from Meta, which recently unveiled its own experimental AR glasses, called Orion. Meta plans to attract developers to its platform next year, ahead of a consumer launch.
Developer-Friendly Platform
In a letter to investors, Snap emphasized the importance of developers to its Spectacles and AR initiatives, stating that it aspires to be the most developer-friendly platform in the world.
Shares Pop in Extended Trading
Despite the cautious Q4 guidance, Snap shares jumped more than 10% in extended trading, indicating investor optimism about the company’s long-term prospects.
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