After U.S. markets closed for trading yesterday afternoon, Snap Inc. (SNAP:NYSE), which operates the popular Snapchat camera and social media application, announced financial results for its third quarter ended September 30, 2020.
The company reported that Q3/20 revenue increased by 52% to $679 million, compared to $446 million in Q3/19. The firm also highlighted that adjusted EBITDA improved to $56 million in Q3/20, compared to an adjusted EBITDA loss of $42 million in Q3/19.
The company's CEO Evan Spiegel commented, "Our focus on delivering value for our community and advertising partners is yielding positive results during this challenging time. We're excited about the growth of our business in Q3/20 as we continue to make long-term investments in our future...The adoption of augmented reality is happening faster than we had previously anticipated and we are working together as a team to execute on the many opportunities in front of us."
Snap indicated that the number of daily active users (DAUs) increased to 249 million in Q3/20, representing an increase of 39 million or 18% year-over-year. The firm stated that the increase in the number of DAUs was observed in both iOS and Android users. The company also noted that the overall average number of daily "Snaps" in Q3/20 grew 25% year-over-year.
The firm advised that it has invested greatly in its Discover platform as a content entertainment destination and noted that the total daily time spent by Snapchatters watching shows on the platform increased by 50% in Q3/20 versus Q3/19. The company highlighted that the average number daily Snapchatters in India who watched the Discover content increased sequentially by nearly 50% in Q3/20 and that last month greater than 40% of the U.S. Gen Z population watched sports Discover content on Snapchat. The firm also pointed out that "SportsCenter viewership on Snapchat increased by 80% from July to September."
The company stated that, in addition, it strengthened its ad platform, products and advertiser engagement. The firm noted that it partnered with many large brand advertisers including Champs Sports, Kohl's, Levi's, Jordan Brand, Sally Hansen and several others. The firm said that it was successful in launching augmented reality-powered virtual try-on experiences with these advertisers.
The firm also stated that it launched a global B2B marketing campaign, a new advertising platform created to match ad inventory to target audiences and a gaming bundle tailored to a specific category, which has led to impactful advertiser partnerships.
The company advised that due to uncertainties surrounding the COVID-19 situation and current market conditions it is not providing estimates for Q4/20 revenue or adjusted EBITDA at this time.
Snap Inc. is headquartered in Santa Monica, Calif., and describes itself as a camera company. The firm's primary product is Snapchat, a camera application that helps people to communicate through short videos and images known as a Snap. The company claims that it aims to empower people to live in the moment and express themselves while learning about the world and having fun.
Snap Inc. began the day with a market capitalization of around $41.8 billion with approximately 1.47 billion shares outstanding and a short interest of about 4.3%. SNAP shares opened almost 23% higher today at $34.97 (+$6.52, +22.92%) over yesterday's $28.45 closing price and reached a new 52-week high this morning of $38.89. The stock has traded today between $34.52 and $38.89 per share and is currently trading at $37.42 (+$8.93, +31.53%).[NLINSERT]
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