Snap Inc. shares rose 13% on Tuesday following the release of the company's second-quarter financial results. The company reported revenue of $1.6 billion, an 18% increase year over year, which exceeded the $1.53 billion expected by analysts.
Snap reported a loss of 10 cents per share for the quarter ended in June. This loss represents a narrowing from the 16 cents per share loss reported a year earlier. The results surpassed expectations from analysts polled by FactSet and S&P Global Market Intelligence, who had anticipated a loss of 12 cents per share.
Snap shares surged on Tuesday after beating Q2 expectations.
Growth in advertising and user engagement
CEO Evan Spiegel attributed the quarterly performance to better momentum with large advertisers in North America and stronger international revenue growth. Spiegel also noted that World Cup-related spending and strength among small and medium-sized businesses contributed to the results.
User engagement metrics showed growth within the Snapchat app, which is approaching 1 billion monthly users. Specifically, the number of people posting to Spotlight, an algorithmic video feed, grew more than 115% year over year, while Spotlight daily active users increased by more than 20% compared to the previous year.
Market context and challenges
Despite the recent surge, Snap shares have declined by more than 30% year to date. The stock remains down roughly 92% from its 2021 all-time high of approximately $75.
The company has been navigating competition from Meta's Facebook and TikTok in the social media and advertising sectors, while also managing rising infrastructure costs.
