Snap Jumps After Earnings Beat, Solid Overall Financials

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Saudi Arabia's Prince Alwaleed bin Talal, a well-known tech investor, announced on Tuesday that he had invested $250 million into the company, in return for a 2.3% stake.

Shares of Snap initially dropped, then jumped as high as $14.90 in extended trading following the report, after climbing less than 1 percent to $13.12 in NY.

But it posted otherwise unusually strong numbers - as well as a $250 million investment from a Saudi prince - that sent its stock soaring as much as 13%, before it came crashing down and bouncing all over the place again following renewed concerns around daily user numbers going forward. Wall Street had forecast a loss of 17 cents per share for the second quarter.

Daily active users however are down about 4 million, from 192 million to 188 million.

With self-service ads, Snap has been able to grow revenue in regions such as Australia and the Middle East, where direct sales efforts are more limited and advertisers have few other options to market to its mainly 18-34-year-old users.

For the quarter ended June 30, Snap said it lost an adjusted $0.14 per share in the quarter ended June 30, where analysts had expected a loss of $0.18 per share. Speaking six months after the relaunch, he added: "We have been working hard to iterate and improve Snapchat based on the feedback from our community". Also, overall revenue is now $262 million this quarter.

Snap only brought in $2 million in non-advertising revenue.

"On the positive side, Story Ads transitioned to programmatic (75% of ad revenue now programmatic), Snap Pixel entered general availability, and the self-serve platform saw some updates in the quarter".

Snap executives told analysts that the redesign was the primary reason for usage slipping and that a European Union data protection law that spurred changes to user privacy terms had no material effect.

The ephemeral social media company revealed in its latest earnings report that its daily active user count has dipped, attributing the decline to early frustrations with its new-look app.

Since then, the company has also launched a second-generation pair of its Spectacles, camera-enabled sunglasses that can upload content directly to Snapchat, in an attempt to diversify beyond software.



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