Snap beats revenue expectations thanks to World Cup advertising boost
Snap beat Wall Street analysts’ expectations for second-quarter revenue thanks to higher advertising spending during the FIFA World Cup and stronger campaign activity from major advertisers in North America. Shares of the social media company rose 9% in after-hours trading.
Snap’s focus on direct-response advertising – designed to drive specific actions, such as downloading apps or visiting a website – is helping the company attract advertisers in a crowded market, where larger rivals such as Meta Platforms are offering AI-driven tools for better audience targeting.
Snapchat’s parent company offerings include Smart Campaign Solutions, an AI suite of advertising tools that automates bidding, budgeting and audience targeting. This enables advertisers to achieve better results more efficiently.
“After several quarters of improving our advertising products and go-to-market approach, we saw better momentum among large advertisers in North America,” says CEO Evan Spiegel. “Spending around the World Cup contributed throughout the quarter, alongside continued strength among small and medium-sized businesses.”
The number of daily active users (DAUs) rose by about 5% in the three months to 30 June to 493 million, maintaining the same growth rate as in the previous two quarters. Snap reported a decline of nearly 7% in the number of daily active users in North America and a drop of about 2% in Europe.
Second-quarter revenue rose by around 19% to $1.60 billion, while analysts had expected $1.54 billion. The growing number of Snapchat+ subscriptions also benefited the company.
Snap expects third quarter revenue to come in between $1.70 and $1.74 billion.
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