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Snapchat Suggests Facebook Ad Boycott Bolstered Q3 Earnings

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Snapchat Suggests Facebook Ad Boycott Bolstered Q3 Earnings

Snap Inc (NYSE: SNAP), during the third-quarter earnings call Tuesday, suggested that the company may have benefited from an advertising boycott affecting rival Facebook Inc. (NASDAQ: FB).

What Happened: Snapchat Chief Business Officer Jeremi Gorman, in prepared remarks for the earnings call, said that the company saw that many brands looked "to align their marketing efforts with platforms who share their corporate values."

"This gave us an opportunity to engage with advertisers and agencies in real time to ensure that our existing partners as well as new prospects understood our offering in relation to our values," Gorman added.

This inexplicit reference to Facebook was first noticed by CNBC.

Why It Matters: The Mark Zuckerberg-led company has seen major companies join an advertising boycott against it over its alleged inaction against hate, violence, and anti-semitism on its platforms. 

Unilever Plc (NYSE: UN), Starbucks Corporation (NASDAQ: SBUX), and Verizon Communication Inc (NYSE: VZ) were among the biggest names to join the Facebook boycott, with the Walt Disney Company (NYSE: DIS) reportedly cutting spending on Facebook and Instagram, as well.

Snap reported a 52% year-over-year sales growth for Q3 on Tuesday. EPS for the quarter was $0.01 per share, 6 cents higher than analyst estimates.

Price Action: After a 0.73% drop during trading hours, SNAP surged 24% during after-hours to close at $28.45.

 

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