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Snap's "AI+AR" results are remarkable! Q3 earnings exceed expectations and it announces a $500 million stock buyback plan.

Market IntelTuesday, Oct 29, 2024 8:00 pm ET

1min read

Snap Inc. (SNAP.US) on Tuesday posted better-than-expected third-quarter results after the market closed, but its fourth-quarter guidance was not optimistic. The company reported that its Q3 revenue grew 15% year-on-year to US$1.37 billion, topping analysts' average estimate of US$1.36 billion; its net loss narrowed to US$150 million from US$370 million a year ago; its adjusted EBITDA was US$130 million, up 229% year-on-year; and its adjusted EPS was US$0.08, topping analysts' average estimate of US$0.05.

Its Q3 global DAU was 443 million, up 9% year-on-year, slightly higher than analysts' average estimate of 441 million; its global ARPU was US$3.10, slightly higher than analysts' average estimate of US$3.09.

Snap said that its Snapchat+ paid users now reached 12 million, up from 11 million reported in its Q2 earnings. Snapchat+ is the company's subscription service launched in 2022, which is positioned as a way for users to experience its exclusive and pre-release features for US$3.99 per month.

Evan Spiegel, Snap's CEO, said: "Our investments in artificial intelligence and augmented reality are delivering new creative experiences for our community and driving innovation on our advertising platform, solidifying our long-term growth opportunities."

It is reported that Snap launched its fifth-generation augmented reality glasses Spectacles in September. People can wear the glasses to see digital images that are superimposed on the real world. The new glasses are only open to developers who want to develop augmented reality applications for the glasses, and they need to pay US$99 per month for this. Snap discussed the importance of developers to its augmented reality glasses and augmented reality projects in a letter to investors. The company said: "We are eager to be the most developer-friendly platform in the world. We are delighted to offer developers the next generation of Spectacles as an invitation and inspiration to create new experiences."

Moreover, Snap announced a US$500 million stock buyback plan.

Looking ahead, Snap expects its fourth-quarter revenue to be between US$1.51 billion and US$1.56 billion, with the midpoint of the guidance range below analysts' average estimate of US$1.56 billion; the company expects its adjusted EBITDA to be between US$210 million and US$260 million, with the midpoint of the guidance range above analysts' average estimate of US$230.7 million.

As of the time of writing, Snap's stock rose more than 9% after the market closed on Tuesday.

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