Evan Spiegel, CEO of SNAP Inc.
Stephen Desaulniers | CNBC
Snap’s stock fell more than 7% in after-hours trading on Thursday after the company reported its fourth-quarter earnings, despite beating Wall Street’s earnings, revenue and user growth expectations. But the company provided an adjusted EBITDA forecast for the first quarter that was much lower than analysts’ consensus expectations.
This is what they reported:
- Adjusted earnings per share: 9 cents versus 7 cents per share predicted by Refinitiv
- Revenue: $ 911 million versus $ 857.4 million predicted by Refinitiv
- Worldwide Daily Active Users (DAUs): 265 million versus 257.79 million per FactSet
- Average revenue per user (ARPU): $ 3.44 vs $ 3.34 predicted by FactSet
Snap believed it would lose between $ 50 million and $ 70 million on an adjusted EBITDA basis in the first quarter, according to Refinitiv, which eschews analyst consensus expectations of an adjusted EBITDA profit of $ 19.3 million.
The company’s net loss fell to $ 113 million, down more than 53% from a net loss of $ 241 million last year.
Snap reported 265 million daily active users, more than 6% more than the 249 million the company reported in October. That figure is up nearly 22% from the 218 million daily users the company reported a year earlier.
Snap expects year-over-year sales growth of 56% to 60% for the first quarter, Snap Chief Financial Officer Derek Andersen said in prepared comments. The company also expects to reach about 275 million DAUs in the first quarter, Andersen said.
However, the company’s performance in the first quarter can be affected by two main factors. First, Andersen stressed that Snap was experiencing a two-week ad break in ad demand as brand advertisers shut down the campaigns in the period following the January 6 uprising in the Capitol.
“As a result, we started the quarter slower than we might have expected,” Andersen said in his prepared comments.
In addition, Andersen warned that Apple’s privacy changes in iOS 14, which are expected to take effect late in the first quarter, “pose a new risk of disruption in demand.” Those changes could affect the ability of social media companies to target ads to users.
“It is not yet clear what the longer-term impact of these changes might be on the momentum of our business’ sales, and this may not be until several months or more after the changes are implemented,” Andersen said in his prepared comments. .
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