Snap reported better-than-expected revenue for the second quarter, attributing the upside to heavier advertising spend associated with the FIFA World Cup and stronger campaign activity among large North American advertisers. Shares rose about 13% in extended trading on the results.
The company said it has been sharpening its commercial offering by prioritizing direct-response ad formats and enhancing its advertising platform with AI-powered capabilities aimed at automated bidding, budgeting and user targeting. "After several quarters of improving our ad products and go-to-market approach, we saw better momentum with large advertisers in North America," CEO Evan Spiegel said. He added that World Cup-related spending contributed during the quarter, alongside continued strength among small- and medium-sized businesses.
Snap’s daily active users (DAUs) climbed roughly 5% to 493 million in the three months ended June 30, matching the growth rate seen in the two prior quarters. The company reported regional softness, with North America DAUs declining nearly 7% and Europe DAUs down about 2% over the same period.
On the top line, second-quarter revenue rose about 19% to $1.60 billion versus the prior year. That figure surpassed analysts' estimates, which were $1.54 billion according to data compiled by LSEG.
Looking ahead, Snap projected third-quarter revenue in a range of $1.70 billion to $1.74 billion, with the midpoint sitting slightly above the $1.70 billion estimate. It also forecast adjusted earnings before interest, taxes, depreciation and amortization of $300 million to $350 million, relative to an analyst consensus estimate of $329.9 million.
Despite the quarter’s revenue beat, Snap faces persistent competitive pressure from larger rivals in social media advertising, most notably Meta, the owner of Facebook and Instagram. The company’s stock has fallen roughly 37% year-to-date even as the latest results produced a positive market reaction.
Snap said it continues to track developments in the legal and regulatory environment that could materially affect its business. The company also plans to disclose further information about its augmented-reality glasses, called Specs, at a launch event in Los Angeles on September 16. Snap first showed the consumer device in June, pricing it at $2,195.
Contextual note: The company emphasized both product-level improvements in its ad stack and timely advertiser demand tied to a major global sporting event as drivers of the quarter’s revenue outperformance. User growth remained steady overall but varied by region.