shares initially soared as much as 20% in after-hours trading as the company beat on the top and bottom lines, then declined and remained relatively flat as investors digested news that some advertisers had paused spending following the onset of the war in the Middle East.
Here's how the company did:
The company highlighted a return to sales growth during the quarter, as revenue rose 5% from the previous year when it logged $1.13 billion. Its earnings per share of 2 cents for the quarter is lower than the 8 cents per share it reported during the of 2022.
As part of Snap's "internal forecast," the company said it expects sales in its fourth quarter to be in the range of $1.32 billion to $1.38 billion, compared to $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 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 affecting 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.
Snapchat+, the company's subscription that costs $3.99 a month, reached over five million subscribers in its recent quarter, up from four million during the prior quarter.
Snap CEO Evan Spiegel highlighted the company's "positive growth in Q3" in a statement, pointing to its major cost-cutting efforts that helped improve the overall business.
Snap said last summer that it would 20% of its workforce consisting of more than 6,000 employees. The cost cutting continued as recently as this September when Snap it shut down its augmented reality enterprise business, resulting in 170 employees exiting the company.
"We are focused on improving our advertising platform to drive higher return on investment for our advertising partners, and we have evolved our go-to-market efforts to better serve our partners and drive customer success," Spiegel said in the statement.
Snap said its chief operating officer, Jerry Hunter, is retiring after seven years at the company.
The company also said it has authorized a stock repurchase program of up to $500 million. It added that it has $3.6 billion in cash, cash equivalents and marketable securities as of Sept. 30, 2023.
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