The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how social networking stocks fared in Q2, starting with Yelp (NYSE:YELP).
Businesses must meet their customers where they are, which over the past decade has come to mean on social networks. In 2020, users spent over 2.5 hours a day on social networks, a figure that has increased every year since measurement began. As a result, businesses continue to shift their advertising and marketing dollars online.
The 6 social networking stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 5.4% while next quarter’s revenue guidance was 0.9% below.
In light of this news, share prices of the companies have held steady as they are up 1.2% on average since the latest earnings results.
Yelp (NYSE:YELP)
Founded by PayPal alumni Jeremy Stoppelman and Russel Simmons, Yelp (NYSE:YELP) is an online platform that helps people discover local businesses through crowd-sourced reviews.
Yelp reported revenues of $370.4 million, up 3.7% year on year. This print exceeded analysts’ expectations by 1.4%. Despite the top-line beat, it was still a mixed quarter for the company with an impressive beat of analysts’ EBITDA estimates but full-year revenue guidance meeting analysts’ expectations.
“Our second quarter results reflect solid execution against our product-led strategy," said Jeremy Stoppelman, Yelp’s co-founder and chief executive officer.
Unsurprisingly, the stock is down 7.8% since reporting and currently trades at $31.62.
Is now the time to buy Yelp? Access our full analysis of the earnings results here, it’s free.
Best Q2: Reddit (NYSE:RDDT)
Founded in 2005 by two University of Virginia roommates, Reddit (NYSE:RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.
Reddit reported revenues of $499.6 million, up 77.7% year on year, outperforming analysts’ expectations by 17.2%. The business had a very strong quarter with EBITDA guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
Reddit pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The company reported 50.3 million daily active users, up 10.5% year on year. The market seems happy with the results as the stock is up 39.7% since reporting. It currently trades at $224.98.
Is now the time to buy Reddit? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Snap (NYSE:SNAP)
Founded by Stanford University students Evan Spiegel, Reggie Brown, and Bobby Murphy, and originally called Picaboo, Snapchat (NYSE: SNAP) is an image centric social media network.
Snap reported revenues of $1.34 billion, up 8.7% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ EBITDA estimates.
Snap delivered the weakest performance against analyst estimates in the group. The company reported 469 million daily active users, up 8.6% year on year. As expected, the stock is down 23.8% since the results and currently trades at $7.15.
Read our full analysis of Snap’s results here.
Pinterest (NYSE:PINS)
Created with the idea of virtually replacing paper catalogues, Pinterest (NYSE: PINS) is an online image and social discovery platform.
Pinterest reported revenues of $998.2 million, up 16.9% year on year. This print topped analysts’ expectations by 2.2%. Taking a step back, it was a satisfactory quarter as it also produced a solid beat of analysts’ EBITDA estimates but revenue guidance for next quarter meeting analysts’ expectations.
The company reported 578 million monthly active users, up 10.7% year on year. The stock is down 6.9% since reporting and currently trades at $36.51.
Read our full, actionable report on Pinterest here, it’s free.
Nextdoor (NYSE:KIND)
Helping residents figure out what's happening on their block in real time, Nextdoor (NYSE:KIND) is a social network that connects neighbors with each other and with local businesses.
Nextdoor reported revenues of $65.09 million, up 2.8% year on year. This result beat analysts’ expectations by 6.1%. Aside from that, it was a satisfactory quarter as it also logged a solid beat of analysts’ EBITDA estimates but a slight miss of analysts’ number of weekly active users estimates.
Nextdoor had the slowest revenue growth among its peers. The company reported 45.71 million monthly active users, up 1.4% year on year. The stock is flat since reporting and currently trades at $1.89.
Read our full, actionable report on Nextdoor here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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