Snap shares seesaw amid concerns about the war’s effect on advertising

Snap shares initially soared as much as 20% in after-hours trading as the company beat on the top and bottom lines, then settled to a slight decline as investors digested news that some advertisers had paused spending following the onset of war in the Middle East.

Here’s how the company did:

• Earnings per share: 2 cents, adjusted, vs. 4 cent loss expected by analysts, according to LSEG, formerly known as Refinitiv.
• Revenue: $1.19 billion vs. $1.11 billion expected, according to LSEG.
• Global Daily Active Users (DAUs): 406 million vs. 405.7 million expected, according to StreetAccount.
• Average revenue per user: $2.93 vs. $2.74 expected, according to StreetAccount.

The company highlighted a return to sales growth during the quarter, as revenues rose 5% from the previous year when it logged $1.13 billion. Its EPS of 2 cents for the quarter is lower than that 8 cents per share it reported during the third quarter of 2022.

As part of Snap’s “internal forecast,” the company said that it expects sales in its fourth quarter to be in the range of $1.32 billion to $1.38 billion, compared with $1.33 billion expected by analysts. Snap said it is not providing official fourth quarter guidance “due to the unpredictable nature of war,” reversing course from the previous quarter when it provided official guidance.

The company said it has “observed pauses in spending from a large number of primarily brand-oriented advertising campaigns immediately following the onset of the war in the Middle East,” which is impacting its current quarter’s sales.

The company’s GAAP net loss widened 2% year-over-year to $368 million in its third quarter, or 23 cents per share.

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