As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at social networking stocks, starting with Snap (NYSE: SNAP).
Businesses must meet their customers where they are, which over the past decade has come to mean on social networks. In 2020, users spent over 2.5 hours a day on social networks, a figure that has increased every year since measurement began. As a result, businesses continue to shift their advertising and marketing dollars online.
The 6 social networking stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 5.4% while next quarter’s revenue guidance was 1.2% below.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Weakest Q2: Snap (NYSE: SNAP)
Founded by Stanford University students Evan Spiegel, Reggie Brown, and Bobby Murphy, and originally called Picaboo, Snapchat (NYSE: SNAP) is an image centric social media network.
Snap reported revenues of $1.34 billion, up 8.7% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a significant miss of analysts’ EBITDA estimates and revenue in line with analysts’ estimates.
“Our global community continued to grow in Q2, reaching 932 million Monthly Active Users as we continued to invest in AI and augmented reality,” said Evan Spiegel, CEO.
Snap delivered the weakest performance against analyst estimates of the whole group. The company reported 469 million daily active users, up 8.6% year on year. Unsurprisingly, the stock is down 16.3% since reporting and currently trades at $7.85.
Read our full report on Snap here, it’s free for active Edge members.
Best Q2: Reddit (NYSE: RDDT)
Founded in 2005 by two University of Virginia roommates, Reddit (NYSE: RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.
Reddit reported revenues of $499.6 million, up 77.7% year on year, outperforming analysts’ expectations by 17.2%. The business had an exceptional quarter with EBITDA guidance for next quarter exceeding analysts’ expectations.
Reddit scored the biggest analyst estimates beat and fastest revenue growth among its peers. The company reported 50.3 million daily active users, up 10.5% year on year. The market seems happy with the results as the stock is up 27% since reporting. It currently trades at $204.62.
Is now the time to buy Reddit? Access our full analysis of the earnings results here, it’s free for active Edge members.
Yelp (NYSE: YELP)
Founded by PayPal alumni Jeremy Stoppelman and Russel Simmons, Yelp (NYSE: YELP) is an online platform that helps people discover local businesses through crowd-sourced reviews.
Yelp reported revenues of $370.4 million, up 3.7% year on year, exceeding analysts’ expectations by 1.4%. Still, it was a mixed quarter as it posted full-year revenue guidance meeting analysts’ expectations.
As expected, the stock is down 3% since the results and currently trades at $33.29.
Read our full analysis of Yelp’s results here.
Pinterest (NYSE: PINS)
Created with the idea of virtually replacing paper catalogues, Pinterest (NYSE: PINS) is an online image and social discovery platform.
Pinterest reported revenues of $998.2 million, up 16.9% year on year. This number beat analysts’ expectations by 2.2%. It was a strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and revenue guidance for next quarter topping analysts’ expectations.
The company reported 578 million monthly active users, up 10.7% year on year. The stock is down 14.1% since reporting and currently trades at $33.70.
Read our full, actionable report on Pinterest here, it’s free for active Edge members.
Meta (NASDAQ: META)
Famously founded by Mark Zuckerberg in his Harvard dorm, Meta Platforms (NASDAQ: META) operates a collection of the largest social networks in the world - Facebook, Instagram, WhatsApp, and Messenger, along with its metaverse focused Reality Labs.
Meta reported revenues of $47.52 billion, up 21.6% year on year. This print topped analysts’ expectations by 6%. Overall, it was an exceptional quarter as it also recorded a solid beat of analysts’ EBITDA estimates and revenue guidance for next quarter exceeding analysts’ expectations.
The company reported 3.48 billion daily active users, up 6.4% year on year. The stock is up 5.2% since reporting and currently trades at $731.80.
Read our full, actionable report on Meta here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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