Snap: results surprise on the upside for once

(CercleFinance.com) - Snap, the owner of the Snapchat messaging service, last night unveiled better-than-expected quarterly results thanks to strong growth in its user base, which enabled it to jump 21% on the stock market.


Accustomed to disappointing publications, the Santa Monica, California-based group saw the number of its active users increase by 10% year-on-year to 422 million at the end of the first quarter, whereas analysts were expecting an average of 420 million.

Sales, most of which come from advertising, consequently climbed 21% to nearly $1.2 billion, thanks in particular to an 85% jump in spending by small and medium-sized businesses.

In other good news, its paid subscription service Snapchat+ - which offers exclusive features - more than tripled in one year, and now boasts more than nine million members.

Following this publication, analysts at Bank of America said they had raised their price target on the stock from $14 to $16, while remaining cautious about the prospect of future earnings.

Snap saw its net loss narrow to 305 million euros in the first quarter, marking a slight improvement on the 328 million euros lost a year earlier.

For the second quarter, Snap said it was targeting 431 million active users for sales of between 1.225 to 1,255 million dollars, i.e. year-on-year growth of 15% to 18%.

While analysts point out that these forecasts are below consensus, they also consider that these cautious targets could be exceeded.

On Wall Street, Snap shares climbed 21% on Friday morning on the New York Stock Exchange, returning to their highest levels since February, but still a long way from their peaks in 2021.

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