Snap soars 20 percent as it profits from Facebook, TikTok struggles

Shares of Snap soared more than 20 percent after the company said users have been flocking to its disappearing-picture app during the pandemic.

Snapchat’s daily active user numbers — a closely watched metric among tech analysts — surged 18 percent to 249 million in the quarter ended Sept. 30, blowing past Wall Street’s forecast for 244 million DAUs.

Snap’s revenue numbers also left estimates in the dust, with the Los Angeles-based company reporting a 52 percent year-over-year jump to $679 million — mainly from an increase in advertisers flocking to the platform. Analysts had forecasted $555.9 million.

Snap shares on Wednesday were recently trading at $35, up 23 percent from the previous day’s close.

Snap said it capitalized on Facebook’s July advertiser ban, which saw major brands temporarily abandon the platform over hate speech issues, as well as on uncertainty created by TikTok’s potential ban by the Trump administration.

The Evan Spiegel-led company predicted that its strong growth will continue through the fall, forecasting 257 million DAUs next quarter, exceeding the Street’s 249.8 million estimate.

Spiegel noted during the call that Snap’s popular face filters and lenses have helped it grow its user base outside the US and Europe because they can be adjusted to be locally relevant.

Average revenue per user was $2.73, up 28 percent from the year-go quarter.

Snap said current-quarter revenue could grow between 47 percent to 50 percent over the year-ago period, but cautioned that it was unclear how the pandemic would affect year-end holiday advertising.

With Post wires. 

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