Snap beats revenue estimates on ad boost from World Cup, shares jump

Aug. 3 (Reuters) - Snap beat second-quarter revenue estimates on Monday, thanks to increased advertising spending during the FIFA World Cup and stronger campaign activity from large advertisers in North America, sending its shares up 9% in extended trading.

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.

The Snapchat parent also provides an AI-powered suite of ad tools, Smart Campaign Solutions, aimed at automating bidding, budgeting and audience targeting.

"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."

Second-quarter revenue jumped around 19% to $1.60 billion, while analysts estimated $1.54 billion, according to data compiled by LSEG.

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 to $350 million, compared with the estimate of $329.9 million.

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.

Snap, however, continues to face intense competition from bigger rivals such as Meta, which owns Facebook and Instagram. Its shares have fallen about 37% so far this year.