Snap Shares Rise After World Cup Ad Spending Drives Q2 Revenue Beat

Snap Inc. (SNAP) on Monday reported second-quarter revenue that surpassed analyst estimates, lifted by a significant increase in advertising spending during the FIFA World Cup and renewed strength from major advertisers in North America. The positive results sent the company's shares jumping 9% in extended trading.

Second-Quarter Performance

The social media company's revenue for the three months ending June 30 jumped approximately 19% to $1.60 billion. This figure exceeded the consensus estimate of $1.54 billion, according to data compiled by LSEG. The company also benefited from growth in its Snapchat+ subscription service.

Key user metrics from the report include:

• Daily Active Users (DAUs): Increased about 5% to 493 million, maintaining the growth rate of the previous two quarters.
• North America DAUs: Declined by nearly 7%.
• Europe DAUs: Dropped by about 2%.

The declines in its two largest revenue-generating regions mirrored trends from the prior quarter, highlighting a continued challenge despite overall user growth.

Advertising Momentum and Strategy

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Snap's leadership attributed the strong revenue to improvements in its advertising products and a successful go-to-market strategy. The company has focused on direct response ads, which are designed to prompt immediate user actions like website visits or app downloads, helping it compete in a crowded market against rivals like Meta Platforms.

"After several quarters of improving our ad products and go-to-market approach, we saw better momentum with large advertisers in North America," CEO Evan Spiegel said in a statement. "The World Cup-related spending contributed during the quarter, alongside continued strength among small- and medium-sized businesses."

Outlook and Forward Guidance

Looking ahead, Snap provided an optimistic forecast for the third quarter. The company expects revenue to be between $1.70 billion and $1.74 billion, with the midpoint of that range slightly above the Wall Street estimate of $1.70 billion.

Snap also projected adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to be between $300 million and $350 million, compared to the analyst consensus of $329.9 million. The company noted it continues to monitor the evolving regulatory landscape, particularly regarding youth-related issues, which could impact its business.