Snap Inc. reported quarterly revenue and user growth that topped analysts’ estimates, lifted by advertisers’ stepped-up spending and consumers’ increased use of their phones for messaging and entertainment during the pandemic. The shares soared in extended trading.
The company, which makes the popular Snapchat mobile app for sending disappearing photos and videos, said third-quarter revenue rose 52% to $678.7 million, far exceeding the $559.2 million average analyst estimate. Snapchat had 249 million daily active users in the quarter, compared with the 244.6 million average projection in a Bloomberg survey.
Snap has recovered from its early struggles as a public company. The Snapchat app, once dysfunctional on Android phones, is growing faster in Android-dominant markets like India now that those issues are fixed. Features on the app that originally seemed like they would be just for fun—like animated overlays on photos and videos—are becoming increasingly serious tools for advertising and communication as the COVID-19 outbreak limits in-person interactions.