Snap, Inc. (Nasdaq: SNAP), the parent of photo-sharing platform Snapchat, reported a narrower net loss for the second quarter, which also beat the estimates. The improvement reflects an increase in subscriber numbers and the corresponding growth in revenues. The company’s stock gained about 12% following the announcement.
At the end of the June quarter, the company had 203 million daily active users, up 7% from the first quarter and 8% from the year-ago period. Revenues increased by 48% to $388 million and exceeded the estimates.
Adjusted loss narrowed sharply to $0.06 per share in the second quarter from $0.14 per share a year earlier. Unadjusted net loss was $255.2 million or $0.19 per share, compared to a loss of $353.3 million or $0.27 per share last year. Analysts were looking for a wider loss.
At the end of the June quarter, the company had $203 million daily active users, up 7% from the first quarter
During the quarter, operating cash flow improved by $104 million to (-)$96 million, compared to the second quarter of 2018, while free cash flow improved by $131 million to (-)$103 million.
Evan Spiegel, CEO, said, “The growth in our community, engagement, and revenue is the result of several transitions we completed over the past 18 months. We look forward to building on our momentum and making significant ongoing progress in each of these areas.”
For the third quarter of 2019, the management expects revenues to be between $410 million and $435 million, compared to $298 million last year. The outlook for adjusted EBITDA is in the range of a loss of $85 million to $60 million.
Earlier today, brokerage Stifel upgraded Snap’s stock to buy from hold and raised the price target to $17 from $13, driving the stock sharply higher during the regular session. The shares have been recovering from the record lows seen in the final weeks of last year. They more than doubled since the beginning of the year.