Shares of Snapchat parent Snap (NYSE:SNAP) have jumped today, up by 6% as of 1:50 p.m. EDT, after peer Twitter (NYSE:TWTR) reported strong third-quarter earnings. Snap reports its own third-quarter results after the market close today.
It's not uncommon for companies to enjoy sectorwide optimism when peers post solid results. In Snap's case, investors are hoping the company can similarly benefit from the booming market for digital advertising on social media platforms. Importantly, Twitter was able to deliver GAAP net income despite a shrinking user base, and Snap's daily active user (DAU) base started to contract for the first time last quarter. Snap lost 3 million DAUs on a sequential basis in the second quarter, which it blamed on its controversial redesign.
Snap this week also announced that it was hiring two new C-suite executives to replace Imran Khan, who said last month he was stepping down as chief strategy officer. His duties will be assumed by Jeremi Gorman, who will become chief business officer, and Jared Grusd, who will become chief strategy officer. Like CFO Tim Stone, Gorman was poached from e-commerce giant Amazon.com. Grusd was most recently the CEO of Huffington Post.
In terms of what to expect from its report later, Snap started offering financial guidance for the first time in August, and expects third-quarter revenue to be in the range of $265 million to $290 million, with adjusted EBITDA of negative $160 million to negative $185 million.