Snap released Q2 earnings today that missed analyst estimates in a few key areas. And, as a result, Snap’s stock was taking a beating in after-hours trading.
Investors seemed focused on Snap’s growing net loss and its failure to hit — if only by a slight margin — analyst consensus estimates on loss per share and user growth.
SNAP leads the field among the major ad-supported tech platforms in releasing its Q2 results. Notably, Q2 is the first quarter to overlap directly with the COVID-19 crisis. As we know, Q1 was almost in the books when shelter-in-place orders cascaded across the country in mid-March.
Snap rival Facebook will report its earnings on July 29, followed by Google on July 30.
A Look at SNAP’s Q2
Today’s outcome stands in stark contrast to April. Back then, Snap’s stock price spiked after the company’s Q1 results handily beat analyst estimates on revenue and loss per share.
Snap reported Q2 revenues of $454 million, a 17% increase over Q2 2019. But its 23 cents diluted net loss per share fell short of the 22 cents analysts expected.
Snap also reported a 17% rise in active daily users to 238 million. This also fell just shy of analyst estimates.
Snap’s Q2 net loss grew 28% to $326 million year over year.
Here is what SNAP Co-founder and CEO Evan Spiegel had to say about the Q2 results in his prepared remarks:
“This has been an extremely challenging time, and our team has done an outstanding job continuing to support the growth of our community…While our revenue growth rate continues to be impacted by ongoing market disruptions, the fundamentals of our business are strong, and the high levels of engagement on our service are backed by years of investment in our self-serve advertising platform, which is helping our partners achieve success and grow their businesses in this uncertain environment.”
Recently, Localogy Senior Analyst Mike Boland has written extensively about Snap’s efforts to build solutions for SMBs to engage local consumers on its platform. These include adding business listings to Snap Maps and an easy to use DIY ad platform for SMBs.