What happened
Shares of Snap Inc surged at market open on Friday, rising about 24% during the first 15 minutes of trading.
The growth stock's gain follows the Snapchat parent's second-quarter earnings release on Thursday. Shares are trading higher because the company obliterated analyst estimates, posting huge growth in revenue and adjusted earnings per share.
Image source: Snap.
So what
Social network company Snap reported 116% revenue growth, putting total revenue at $982 million. Analysts, on average, were expecting revenue of $846 million. This strong top-line outperformance led to a big beat on Snap's bottom line, too. Adjusted earnings per share for the period swung from a loss of $0.09 in the year-ago period to a profit of $0.10. This was ahead of a consensus forecast for $0.01.
Financial results during the period were bolstered by an easy year-ago comparison. Revenue growth slowed in the second quarter of 2020 as advertiser spending took a hit.
Snap's user base also grew nicely, with daily active users increasing 23% year over year to 293 million.
Now what
As Snap faces a tougher comparison in Q3, the company guided for decelerated growth during the period, although management's guidance for 58% to 60% growth was ahead of analysts' forecast.
In the company's second-quarter earnings release, Snap CEO Evan Spiegel said the company is "energized by the many opportunities to grow our community and business around the world."