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Snap Swings To Profit As SPECS Set To Roll Out; Stock Takes A Hit
Snap reported a 14% rise in third-quarter revenue and returned to profit, but its shares fell almost 10% in after-hours trading as investors reacted to the results. The company is also preparing to roll out SPECS, its augmented-reality glasses, as it continues investing in that technology.
Revenue reached $1.72 billion, while net income was $56 million, compared with a $104 million loss a year earlier. Snapchat had 495 million daily active users, up 4% year on year and two million from the previous quarter. SPECS, which Snap says reflects more than a decade of investment and over 7,000 patents, is available for pre-order in the US, UK and France for $2,195, with a refundable $200 deposit.
In short
- Snap returned to profit with $56 million in third-quarter net income.
- Revenue rose 14% to $1.72 billion.
- Shares fell almost 10% after hours as SPECS prepares to launch.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Snap’s return to profit, 14% revenue growth and rising daily user numbers suggest its core business is making progress. Continued investment in SPECS could give the company a chance to build a new revenue stream and put its long-term research to commercial use.
The case against
Investors may reasonably question whether one quarter’s profit is durable, particularly as the share price fell sharply after the results. SPECS requires substantial investment and carries a high $2,195 price, so its commercial prospects remain uncertain while Snap’s user growth was modest.