Snap (NYSE: SNAP) declined to issue guidance for the third quarter in its recently released second-quarter earnings report, but the comments prepared by the company for its next conference call (scheduled for 5 pm ET) offer a “taste of where we are today,” with some estimated figures.
“So far in the third quarter, we estimate year-over-year revenue growth to be 32% through July 19,” says chief financial officer Derek Andersen. And while they are cautiously optimistic, those trends will continue, but conditions could deteriorate. “For example, advertising demand in the third quarter has historically been bolstered by factors that seem unlikely to materialize in the same way that they did in previous years, including back-to-school season, movie release times and the operations of various sports leagues. “
“Our best estimate at this point is that our full quarter revenue growth rate is likely to be below our estimated actual growth rate for the quarter to date, and as a result, we have built our internal investment plan based on a revenue growth of about 20%, “says Andersen.
Meanwhile, the cost structure estimates assume daily active users of 242M-244M in the third quarter (compared to the second quarter figures of 238 million), implying a 15-16% year-on-year growth, compared to the Second quarter rate of 17%.
In addition, the cost of revenue and combined operating costs will grow between 20 and 20 years in the third quarter.
Snap is now only 4.2% after a double-digit drop in minutes after the report. After a choppy exchange around the flat line for social media peers, Twitter (NYSE: TWTR) is now down 0.8%; Facebook (NASDAQ: FB) it is down 0.7%; Pinterest (NYSE: PINS) it is down 2.5%.
