This isn’t a typo: Snap’s stock price on Wednesday surged more than 36% higher, one day after the Snapchat parent company posted strong Q1 revenue and user growth.
The huge jump was the biggest single-day increase for Snap in more than two years; Snap closed the day at $17.01 per share. Those gains also covered up what had been a rocky year for Snap heading into this week, with Snap’s stock price sinking from $16.78 per share in early January to about $12.50 per share before its earnings release.
Snapchat added 11 million daily users during the first quarter, marking its second-best quarter ever in terms of adding new users. Overall, Snapchat now has 229 million daily users. Wall Street was likely just as impressed with Snap increasing sales 44% year-over-year to $462 million, which easily topped analyst projections of $431.4 million.
MoffettNathanson analyst Michael Nathanson, in a note to clients following Snap’s earnings, called its performance “hopeful and frightening at the same time.” He pointed to Snap’s near-60% increase in revenue during the first two months of the year, followed by its 25% increase in March — indicating the company will have to grapple with the ad market cratering because of the coronavirus pandemic.
Snap CEO Evan Spiegel, in a statement on Tuesday, said the app is helping its users stay connected while millions are stuck at home due to COVID-19.
“Snapchat is helping people stay close to their friends and family while they are separated physically, and I am proud of our team for overcoming the many challenges of working from home during this time while we continue to grow our business and support those who are impacted by COVID-19,” Spiegel said.
