It's a Miracle! Snap Shares Pop 10.5% After Massive Earnings Win and $500mln in Stock Buybacks...

Would ya look at that? Snap just managed to have a respectable quarter for once. That’s right, the company responsible for the world record of most d*ck pic shared by degenerate 15 year old boys actually beat expectations across the board - while announcing a girthy $500M stock buyback announcement on top of that.

(Source: Reuters) 

The result? A dramatic 10.5% surge in shares and some happy investors that mimic Vanderbilts better than usual football season this year. For starters, the company reported earnings per share (EPS) of 8 cents, beating the expected 5 cents. Revenue came in at $1.37 billion, slightly ahead of the $1.36 billion analysts were expecting. 

(Source: Giphy) 

What’s more is that Snap also saw global daily active users (DAUs) hit 443 million, surpassing the anticipated 441 million - with global average revenue per user (ARPU) coming in at $3.10, just edging out the expected $3.09. Meaning, Snap’s revenue jumped 15% year-over-year, while its net loss narrowed to $153 million (compared to $368 million this time last year). 

Plus, Snap also gave us an update on its subscription service, Snapchat+, which now boasts 12 million paying subscribers (at $3.99) a month. That’s up from 11 million in August. So yeah, things are definitely looking up.

(Source: Deadline.com) 

But, but, but… don’t get too horned up yet - the company’s Q4 sales forecast came in a bit light as Snap expects revenue of $1.51 billion to $1.56 billion for the holiday quarter. Wall Street, of course, was hoping for a little more holiday cheer, with estimates around $1.56 billion. But still, Snap’s earnings guidance of $210 million to $260 million for Q4 is actually above expectations. Annnnd just like that, we can see the difference between how Wall Street digests social network guidance to chipmaking guidance (Bless your heart, AMD). 

(Source: Investing.com) 

Now in addition to Snap's major earnings win, the company also shared an update on the fifth generation of its Spectacles. Simply put, these augmented reality glasses let you see digital images layered over the real world.

Every dude in his moms basement right now (Source: Giphy)

With that said, these spectacles are only available to developers at the moment, and they’ll set you back $99 a month—for a year. That’s a solid $1,200 to play around with AR apps and build out cool experiences for Snap’s platform.

For this reason, CEO Evan Spiegel couldn’t stop talking about AI and AR. The company’s investments in these areas are driving innovation in its ad platform, which, let’s be real, is Snap’s bread and butter. With AI-powered ad targeting and new formats like SnapMap ads, Snap is trying to lure back advertisers who have been flirting with bigger platforms like Meta (who just so happen to be rolling out their own Orion AR specs). 

However, what got most investors excited was the juicy announcement of a $500 million share repurchase program. Because nothing says "BTFD" like buying back your own stock, especially with Snap’s shares being down 32% for the year before this report, so it’s no wonder the buyback news sent the stock flying after hours.

(Source: Giphy) 

In the end, while Snap’s Q4 outlook may be a little soft, the company is betting big on AI, AR, and a simplified Snapchat experience to keep things moving in the right direction. And with a $500 million buyback in the books, it’s clear they have plenty of cash to keep shareholders happy after this report. Translation: Snaps not dead - far from it. 

In the meantime, keep an eye on Snap post-earnings and as always stay safe and stay frosty, friends! Until next time… 

P.S. Our SURPRISE ALERT still has plenty of room to run! Click here for the details…

Stocks.News holds positions in Snap Inc. and Meta Platforms as mentioned in the article.