Snap shares soar 25% as company beats on earnings, shows strong revenue growth

Snap reported first-quarter results on Thursday that beat analysts' estimates and showed a return to double-digit revenue growth. Shares soared more than 25% in extended trading.  

Here's how the company did: 

Revenue for Snap's first quarter increased 21% from $989 million in the same period last year. The company is growing at an accelerated clip, after it had previously reported six straight quarters of single-digit growth or sales declines.

Snap has been working to rebuild its advertising business after the digital ad market stumbled in 2022, and it's starting to pay off. In its investor letter, Snap said revenue growth was primarily driven by improvements in the company's advertising platform, as well as demand for its direct-response advertising solutions. 

Advertising revenue came in at $1.11 billion in the first quarter. Snap's "Other Revenue" category, which is primarily driven by Snapchat+ subscribers, reached $87 million, an increase of 194% year over year. Snap reported more than 9 million Snapchat+ subscribers for the period.

Adjusted EBITDA for the first quarter was $46 million, far surpassing the $68 million loss expected by analysts, according to StreetAccount. In its investor letter, Snap said adjusted EBITDA "exceeded our expectations" and was primarily driven by operating expense discipline, as well as accelerating revenue growth.

"Given the progress we have made with our ad platform, the leadership team we have built, and the strategic priorities we have set, we believe we are well positioned to continue to improve our business performance," Snap wrote in the letter. 

Though Snap's growth accelerated, it still fell behind that of Meta, which reported 27% growth in its better-than-expected first-quarter