Shares Of Snapchat’s Parent Company Rise As Its Advertising System Improves

(CTN News) – In after-hours trading, shares in Snapchat Inc. surged 21% after the social media company exceeded Wall Street’s expectations for its third quarter revenue and user growth. This led to the company’s shares rising 21%.

Snapchat reported last week that its advertising system had undergone improvements that result in faster results.

In the first three months of this year, Snapchat’s daily active users rose from 419.6 million to 422 million, exceeding analyst expectations of 419.6 million users. Meanwhile, revenue rose 21% to $1.2bn during the first quarter of the year, surpassing the $1.12bn consensus estimate of analysts by 21%.

Founded in Santa Monica, California, Snapchat has struggled for years to compete with larger rivals, such as Meta Platforms, who own Facebook and Instagram, for advertising dollars. In spite of this, the company has been working on ways to improve the way its ads are targeted to users over the past year, and simplify the way they are interacted with.

Snapchat revealed in a letter to shareholders that their business has improved faster than they expected due to upgrades and a higher demand for features that help brands drive sales and website visits.

In the eyes of Evan Spiegel, CEO of Snapchat, “the value we provide to our community and our advertising partners has translated into improved financial performance.” In the last few years, our large, growing, and hard-to-reach community, our brand-safe environment, and our full-funnel advertising solutions have made us an increasingly important partner for businesses of every size.

In a resolution passed by the US Senate on Tuesday, Chinese tech company ByteDance will have up to a year to divest its wildly popular video app TikTok – yet another of Snap’s competitors – otherwise the app will be banned by the US government.

Snapchat’s revenue for the second quarter is likely to be between $1.23 billion and $1.26 billion, slightly above analysts’ expectations. The firm expects its user base to grow to 431 m.

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