Shares of Snap (NYSE: SNAP) initially climbed as much as 12% early Wednesday after the company posted strong quarterly results. But then the stock gave up its gains into the afternoon, trading down 4.4% as of 3:30 p.m. ET after management warned of potential weakness in the ad market toward the end of this year.

Snap's third-quarter 2023 revenue climbed 5% year over year, to $1.189 billion -- notably returning to year-over-year revenue growth after two quarters of declines -- translating to a net loss under generally accepted accounting principles (GAAP) of $368.3 million, or $0.23 per share. On an adjusted (non-GAAP) basis -- which excludes items like stock-based compensation -- Snap achieved net income of $0.02 per share. Analysts, on average, were expecting an adjusted net loss of $0.05 per share on lower revenue of $1.11 billion.

Snap also confirmed its daily active users climbed 12% year over year to 406 million, and over 200 million people have sent more than 20 billion messages through its new My AI chatbot feature. Average revenue per user declined 5.8% year over year to $2.93.

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Source Fool.com