Snap earnings Q3 2019

Snap shares bounced around in extended trading on Tuesday after the app developer beat estimates for the third quarter but provided weak guidance for the fourth quarter.

The company, which is the maker of Snapchat, posted a slimmer-than-expected loss for the third quarter while exceeding expectations for user growth and revenue.

• Loss per share: 4 cents vs. 5 cents forecast by Refinitiv
• Revenue: $446 million vs. $435.1 million forecast by Refinitiv
• Global daily active users (DAUs): 210 million vs. 207 million forecast by FactSet
• Average revenue per user: $2.12 vs. $2.10 forecast by FactSet

Snap said revenue in the fourth quarter is expected to be $540 million to $560 million, a disappointment relative to expected sales of $555.4 million, according to Refinitiv. At the midpoint of its guidance range, sales in the fourth quarter would climb 41% from a year earlier.

TechCrunch mistakenly published a story containing Snap’s quarterly results early and the stock crashed as much as 11% before bouncing back after the press release hit.

“We are a high growth business, with strong operating leverage, a clear path to profitability, a distinct vision for the future, and the ability to invest over the long term,” Snap CEO Evan Spiegel said in a statement. “We are excited about executing on the many opportunities in front of us.”

Snap’s user base grew to 210 million daily active users. This was the third quarter in a row of growth for the company, which saw its user base shrink from the first quarter through the third quarter of last year.

The company reported revenue of $446 million for the third quarter, up nearly 50% compared to a year prior. Snap reported a gross margin of 51%, up from 36% gross margin reported a year prior.

After a rough 2018, Snap has bounced back in 2019. Snap’s rally in 2019 has lifted the stock closer to its $17 IPO price from 2017. The shares sank as low as $4.99 on Dec. 21.

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