Snap reported revenue and earnings for the second quarter that exceeded expectations. Following the earnings report, the company's stock rose 10% in extended trading.
Second-quarter revenue rose 19% to $1.34 billion compared to the previous year. The company's net loss for the period narrowed to $164 million, down from $262.6 million a year ago, with a net loss per share of 16 cents.
Snap forecasted third-quarter sales to be between $1.7 billion and $1.74 billion, a range that topped analyst estimates of $1.7 billion. Adjusted earnings for the third quarter are projected to be between $300 million and $350 million, with a midpoint of $325 million. This midpoint trails a StreetAccount projection of $327 million.
CEO Evan Spiegel said the company saw improving momentum in its advertising business, noting better momentum with large advertisers in North America and stronger revenue growth internationally. Spiegel also stated that the company received a boost from spending tied to the World Cup.
In its May earnings report, Snap stated that large advertisers in North America remained a headwind to advertising growth.
The company's global daily active users (DAU) increased 5% from a year earlier, though North American DAU declined 7% year-over-year to 92 million. North American DAU remained flat compared to the first quarter.
Revenue from the Snapchat+ subscription service and other categories rose 85% year-over-year to $316 million in the second quarter.
Snap lifted its full-year infrastructure costs by $50 million to a range between $1.65 billion and $1.7 billion, stating the increase accounts for 'additional investment in the AI and machine learning infrastructure needed to support revenue growth.'
Augmented reality and hardware outlook
In June, Snap revealed augmented reality glasses named Specs, which the company expects to ship later this year. The glasses will cost $2,195 with a $200 refundable deposit.
The price for Specs is higher than Meta Ray-Ban smart glasses, which start around $350, but lower than Apple's Vision Pro, which starts at $3,500.
What we’re hearing from folks is really that they want to try Specs.
Spiegel stated that the long-term opportunity to develop the next computing platform is 'enormous,' though mass-market consumer adoption of Specs will likely not occur until the end of the decade.
In recent earnings reports, Reddit reported second-quarter earnings that beat on both top and bottom lines but noted search-referral traffic was 'choppy.' Meta issued a weaker-than-expected sales forecast and reported dwindling free-cash flow due to AI-related expenditures.
