Snap beats revenue estimates on ad boost from World Cup

The company said it continues to monitor the evolving legal and regulatory landscape in the U.S. and internationally that could materially impact its business, including increased scrutiny on youth-related issues.

Aug. 3 (Reuters) - Snap beat Wall Street estimate for second-quarter revenue on Monday, thanks to increased advertising spending during the FIFA World Cup and stronger campaign activity from large advertisers in North America.

The social media firm's focus on direct response ads, designed to prompt specific actions such as app downloads or website visits, is helping it attract advertisers in a crowded market, where bigger rivals such as Meta Platforms is offering AI-powered tools for better user targeting.

The Snapchat parent provides Smart Campaign Solutions, its AI-powered suite of ad tools that automate bidding, budgeting and audience targeting, allowing advertisers to improve results more efficiently.

Second-quarter revenue jumped around 19% to $1.60 billion, while analysts estimated $1.54 billion, according to data compiled by LSEG. Growing Snapchat+ subscriptions also benefited the company.

Snap expects third-quarter revenue of $1.70 billion to $1.74 billion, with its midpoint slightly above the estimate of $1.70 billion. It forecast adjusted earnings before interest, taxes, depreciation, and amortization of $300 million and $350 million, compared with the estimate of $329.9 million.

"After several quarters of improving our ad products and go-to-market approach, we saw better momentum with large advertisers in North America," CEO Evan Spiegel said. "The World Cup-related spending contributed during the quarter, alongside continued strength among small- and medium-sized businesses."