Wrapping up Q2 earnings, we look at the numbers and key takeaways for the social networking stocks, including Nextdoor (NYSE: KIND) and its peers.
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 1.4% on average since the latest earnings results.
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 print exceeded analysts’ expectations by 6.1%. Overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ EBITDA estimates.
Nextdoor delivered the slowest revenue growth of the whole group. The company reported 45.71 million monthly active users, up 1.4% year on year. The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $1.89.
Is now the time to buy Nextdoor? 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.
Reddit achieved 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 40.2% since reporting. It currently trades at $225.80.
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 24.4% since the results and currently trades at $7.09.
Read our full analysis of Snap’s results here.
Meta (NASDAQ: META)
Famously founded by Mark Zuckerberg in his Harvard dorm, Meta Platforms (NASDAQ: META) operates a collection of the largest social networks in the world - Facebook, Instagram, WhatsApp, and Messenger, along with its metaverse focused Reality Labs.
Meta reported revenues of $47.52 billion, up 21.6% year on year. This print topped analysts’ expectations by 6%. Overall, it was a strong quarter as it also put up an impressive beat of analysts’ EBITDA estimates and a decent beat of analysts’ number of daily active people estimates.
The company reported 3.48 billion daily active users, up 6.4% year on year. The stock is up 7.8% since reporting and currently trades at $749.40.
Read our full, actionable report on Meta here, it’s free.
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 number surpassed analysts’ expectations by 2.2%. Aside from that, it was a satisfactory quarter as it also logged an impressive 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 6.4% since reporting and currently trades at $36.70.
Read our full, actionable report on Pinterest 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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