Snap Inc., the parent company of popular social media platform Snapchat, reported a surprising 5% growth in revenue for its third quarter, breaking a streak of revenue declines. The company's unexpected performance helped send its stock soaring by 5% in after-hours trading on Tuesday, according to a report from MarketWatch.

During the third quarter, Snap recorded $1.19 billion in revenue, up from $1.13 billion during the same period last year. Analysts had predicted revenue of $1.11 billion, making Snap's results even more impressive. This marks a significant turnaround for the company, as its revenue had been declining year-over-year in the two previous quarters.

Despite the revenue growth, Snap still reported a net loss of $368 million, or 23 cents per share, for the third quarter. However, this loss was only slightly higher than the $360 million loss, or 22 cents per share, from the year before. Analysts had expected a loss of 24 cents per share.

In a surprising move, Snap also announced that its board of directors has approved a stock-buyback program of up to $500 million. This decision indicates the company's confidence in its future prospects and its commitment to returning value to shareholders.

Looking ahead to the December quarter, Snap provided some insight into its internal forecasts. The company expects revenue ranging from $1.320 billion to $1.375 billion, slightly below the FactSet consensus of $1.34 billion. However, Snap refrained from providing formal guidance due to the uncertainty caused by the ongoing war in the Middle East.

Snap attributed the limited visibility in advertising demand to several factors. Historically, the company has experienced a surge in revenue during the holiday quarter. Additionally, the fourth quarter usually sees a higher proportion of brand advertising, which grew at a slower pace compared to direct-response advertising during the third quarter.

The war in the Middle East has also impacted Snap's advertising revenue. The company observed pauses in spending from numerous brand-oriented advertising campaigns following the onset of the conflict. Although some campaigns have resumed, Snap continues to face the risk of additional pauses or an increase in their magnitude.

Despite these challenges, Snap remains optimistic about its direct-response advertising platform and is striving to deliver further improvements. The company stated, "We believe we are on the right path and are focused on executing against our roadmap. However, the limited visibility in advertising demand inhibits us from providing any specific guidance for Q4."

Snap's surprising revenue growth and the approval of a stock-buyback program has instilled confidence among investors, as reflected in the 5% increase in its stock price during after-hours trading. The company's ability to navigate through potential headwinds, such as the war in the Middle East, will be crucial in sustaining its growth trajectory moving forward.