Snap Inc. CEO Evan Spiegel said the company is on track to reach profitability by the fourth quarter while continuing to capitalize on emerging technologies, including augmented reality and gaming.
Speaking on an earnings call, Spiegel said Snap's recent growth put the Snapchat parent company on a "clear path" to achieve its goal of adjusted EBITDA profitability during the last quarter of this year.
Snap on Oct. 22 posted a third-quarter net loss of $227.4 million, or 16 cents per share, compared to a loss of $325.1 million, or 25 cents per share, in the same period a year ago. On an adjusted basis, Snap reported a non-GAAP EPS loss of 4 cents, versus 12 cents a year earlier. The S&P Global Market Intelligence consensus GAAP and normalized EPS estimates for the quarter called for losses of 19 cents and 5 cents, respectively. The normalized EPS consensus estimate for the fourth quarter predicts the company will break even on an adjusted basis.
Snap reported adjusted EBITDA of negative $42.4 million for the just-ended third quarter, compared to negative $138.4 million in the like period a year earlier.
Beyond turning a profit, Snap CFO Derek Andersen said achieving positive free cash flow is a priority for the company.
Spiegel said Snap's latest efforts in augmented reality and gaming will be key drivers for the business in coming years.
The company in April launched new augmented reality features, including AR filters that overlay video, including templates of popular global landmarks such as the Capitol Building in Washington, D.C., and the Eiffel Tower in Paris. Snap also unveiled a gaming platform that allows Snapchat messaging users to launch original and third-party multiplayer games directly from chat.
"Snapchat has become so much more than a messaging service," Spiegel said on the Oct. 22 call.
Management said Snap's updated Android app expanded its performance on a wider variety of devices and increased the company's rate of adding new Android users. The updated app launched earlier this year and is available globally.
Snap's third-quarter revenue jumped to $446.2 million from $297.7 million in the prior-year period. That compared to Wall Street consensus expectations calling for $436 million in revenue, according to data compiled by S&P Global Market Intelligence.
Snap's daily active users, meanwhile, grew to 210 million in the just-ended quarter, compared to 186 million in the comparable 2018 period.
The company's stock was trading down after-hours as the earnings call came to a close.