By Yasin Ebrahim
Investing.com – Shares of Snap Inc (NYSE:SNAP) fell in after-hours trading on Tuesday, after signs of slowing user growth overshadowed better-than-expected earnings and revenue in the second quarter.
Snap also warned that second-quarter year-on-year revenue growth will decelerate substantially compared to the first quarter.
Snap reported an earnings loss of $0.17 per share on $230.7 million in revenue against analysts’ expectations of an earnings loss of $0.17 per share on $244.5 million in revenue.
An earnings loss of $2.31 per share equates to roughly a $2.2 billion loss for the quarter, as the company revealed that stock-based compensation soared to $2.0 billion.
A large chunk of Snap’s revenue comes from advertisers seeking to leverage the social media company’s popularity with a younger audience.
Daily active users, a key metric for social media companies, missing Wall Street estimates of 239.1 million daily active users.
Average revenue per user was $1.21, unchanged year-on-year.
Looking ahead, the company given the uncertainties related to the ongoing COVID-19 pandemic and the rapidly shifting macro conditions, it would not provide its expectations for revenue or adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of 2020.
Snap Beats Forecast, but Shares Crackle on Signs of Slowing User Growth
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