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What To Know About Snap's Q3 User Growth Acceleration

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What To Know About Snap's Q3 User Growth Acceleration

Snap Inc (NYSE: SNAP) reported Tuesday better-than-expected third-quarter earnings, revenue and user growth. Notwithstanding the above-consensus results, the stock slid 5.86% Wednesday, spooked by a light revenue guidance range, which at the midpoint came in below the consensus expectations.

Setting aside the post-earnings sell-off, which may have to do with profit taking after a pre-earnings run-up, one bright spot has been the stellar user growth.

User Numbers Head Northward

In the third quarter, Snap's average daily user growth, or DAU, rose 24 million or 13% year-over-year to 210 million, an acceleration from the 8% growth in the second quarter. Sequentially, DAU increased 7 million or 4%.

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Source: Snap

"We continue to benefit from improvements we have made to our application and sustained momentum with new Snapchatters," Snap said in its earnings release.

The company also attributed the improvement to seasonality headwinds, which came in at the low end of its expectations.

See Also: Citron Sees Snap As A 'Much More' Compelling Investment Than Twitter

Rest Of The World To The Rescue

North America and Europe have become mature markets for the camera company, with single-digit year-over-year growth for the quarter, at 6% and 9%, respectively.

The rest of the world stood out, with 28% user growth to 61 million, with the company attributing the strength to improved Android application. Snap also said it is doubling down on these efforts through other measures such as localizing the product experience, through language support, local content and local partnerships.

Notwithstanding decelerating user growth, North America accounted for 40% of the DAUs compared to Europe's 31% and the rest of the world's 29%.

Snap Vs. Twitter

Twitter Inc (NYSE: TWTR) reported earlier today monetizable DAUs of 145 million, which works out to 69% of Snap's number. This, however, represented a 17% increase from the year-ago quarter.

U.S. mDAU rose from 26 million to 30 million and international mDAU improved from 98 million to 115 million.

The social media platform reported third-quarter revenue and earnings misses, with the company attributing the shortfall to product issues and advertising headwinds.

At last check, Snap shares were sliding 1.93% to $12.93 and Twitter shares were tumbling 18.28% to $31.73.

Posted-In: Citron Research SnapChatEarnings Short Sellers Guidance Tech Best of Benzinga

 

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