Shares of American camera and social media company – Snap jumped more than 19 percent on Friday, less than a day after the company’s strong second-quarter earnings beat. As of this morning, the company’s stock had soared as much as 24.95 percent.
For the quarter, Snap published 293 million global active users beating 290.3 million that analysts had expected, according to StreetAccount. The impressive figure also surpassed the 238 million daily users that the company reported a year ago, by 23 percent. Investors were impressed by the company’s growth in regards to users and engagement.
Apart from its increased number of users and engagement, Snap also saw huge growth in its ads wing irrespective of concerns around potential Apple iOS privacy changes and how it might be affected by it.
According to what the company said, it was not affected by the privacy changes that came with Apple’s iOS 14.5, it was therefore worried for almost nothing. The reason behind Snap not being affected by the changes, according to what Snap executive Jeremi Gorman said on Thursday, was that iOS users were being slow to update their devices to iOS 14.5 and Snap was observing “higher opt-in rates than we are seeing reported generally across the industry, which we believe is due in part to the trust our community has in our products and our business.”
“We have written much about the strength of the online ad markets over the past 9 months…but even we under-estimated 2Q/3Q results,” analysts at Morgan Stanley wrote in a Friday note. “SNAP’s ad revenue strength was broad-based across use cases (Stories, Discover, lenses, and AR, etc) as performance-focused innovation like improved matching, dynamic product ads, and new AR lenses are leading to increased advertiser and spend per advertiser growth,” the firm added.
Pointing to the company’s broad-based growth and engagement, analysts at Wells Fargo on Friday said that “While the ultimate impact remains uncertain, we are confident SNAP will continue to execute across its five key platforms (Stories, Camera, Spotlight, Map, and Communications) with ensuing strong engagement trends amid innovation, improvement, and adoption across multiple fronts (new ad formats, AR tools, optimization, original content, gaming) with ample monetization runway.”
Microblogging platform Twitter also reported revenue that surpassed estimates, its fastest revenue growth since 2014, and saw huge improvements in its ads business.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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