(CercleFinance.com) – Snap Inc., the owner of the Snapchat messaging application, reported quarterly results last night that were better than expected, which earned it a timid increase on Thursday on Wall Street.
A little less than an hour after opening, the technology group’s stock rose by around 3%, compared with a decline of around 1% for the S&P 500, the benchmark index for American managers.
The Santa Monica, California-based company announced yesterday that its third-quarter revenue rose 5 percent to $1.19 billion, compared to a consensus estimate of just $1.11 billion.
‘Turnover returned to growth faster than expected, which allowed the group to significantly exceed expectations in terms of profits,’ emphasize Canaccord Genuity analysts.
Adjusted Ebitda stood at $40 million, compared with an operating loss of $73 million last year, when analysts expected a shortfall of $73 million.
Its net loss, however, remained stable, at $368 million, compared to $360 million at the end of the third quarter of 2022.
Snap said its number of daily active users increased to 406 million in the third quarter, compared to 405.8 million analysts had targeted.
Despite this better-than-expected performance, analysts emphasize that the technology group’s visibility remains ‘limited’ given the current economic slowdown.
‘There is progress, but it takes more than a quarter to see a real trend’, recall the Wells Fargo teams, who consider the publication insufficient to raise their recommendation, which is currently to ‘weight in line’.
For the fourth quarter, Snap says it is targeting revenue of $1.32 million to $1.375 million, or annual growth of between 2% and 6%, a forecast in line with the consensus.
But its adjusted EBITDA target – which ranges from $65 million to $105 million – is below the average analyst estimate, which stands at $104 million.
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