Snap’s daily active users jumped 14% year-on-year for the second quarter, the platform said today, to 397 million even as revenue dipped in a tough ad market and with little visibility ahead.
“We are excited by the progress we have made delivering increased return on investment for our advertising partners, growing our community to 397 million daily active users, and reaching more than 4 million Snapchat+ subscribers,” said CEO Evan Spiegel. DAUs also increased sequentially in all regions.
Snapchat+, a subscription service that offers exclusive, experimental, and pre-release features, passsed 4 million paying subscribers in Q2, a year after launch.
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Net losses of $377 million were narrowed, from $422 million on revenue of $1.07 million, down 4% from the prior year. “From a revenue perspective, our business remains in a period of rapid transition as we work to improve our advertising platform, while forward visibility of advertising demand remains limited,” the company said, guiding the Street $1.07-$1.13 billion in revenue for the current third quarter, adjusted EBITDA of between negative $50 million and negative $100 million.
Investors didn’t love the the numbers and pummeled the stock, which down nearly 16% in after-hours trade. Executives will host a call at 5:30 to discuss the numbers and outlook.
Also in the second-quarter, Snap was free cash flow negative to the tune of $119 million — vs a negative $147 million the year earlier.
Subscribers were a bright point, responding to a series of new features led by AR.
My AI, an AI-powered chatbot, has seen over 150 million people have sent over 10 billion messages, Snap said. The company expanded its Stories revenue share program to more creators, onboarded new media partners and renewed agreements globally to grow its local content offering, including ITV in the UK, ProSieben in Germany, Network 18 in India, and ESPN in the Netherlands.
Snap anticipates continued robust growth with Q3 daily active users reaching 405-406 million.
Snap is one of the first companies out with earnings in the media/social media space after Netflix and it’s a bellwether for digital advertising, which makes up most of its revenue, setting the table for those that follow from Meta to Amazon and others. Google/YouTube parent Alphabet also weighs in this afternoon.
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