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Snap
The top and bottom line for the fourth quarter passed Wall Street expectations on Thursday. But executives said 2021 will be a tumultuous year after a January ad spend hiatus and technical changes in it
Apple
plans to implement.
Snap share (ticker: SNAP) fell 7.7% in the extended session. The stock retreated 1.6% during regular trading and closed at $ 58.31.
Snap reported a fourth-quarter net loss of $ 113.1 million, equivalent to eight cents a share, compared to a loss of $ 240.7 million, or 17 cents a share, a year ago. Adjusted for share compensation, among other things, the profit amounted to nine cents per share. Wall Street had expected an adjusted profit of seven cents a share.
The company reported sales growth of 62% to $ 911.3 million from $ 560.9 million a year ago. Consensus revenues were estimated at $ 856.1 million.
“We delivered our first full year of adjusted Ebitda profitability and, as we look to the future, we are excited to build on our investments in augmented reality, mapping and content to drive our continued growth,” said CEO Evan Mirror.
Ebitda — Earnings Before Interest, Tax, Depreciation, and Amortization — is a non-GAAP measure of profitability.
In prepared comments, executives attributed the profits to the company’s growth outside the US and the improvements it has made in ad technology. Chief Business Officer Jeremi Gorman said direct response ads had been stable throughout the year.
The daily membership of Snap rose to 265 million, well above the consensus forecast of 257.9 million.
However, the next quarter can be more challenging. In prepared remarks, Chief Financial Officer Derek Anderson said Snap was going through “a hiatus” in the first two weeks of January due to the violent attack on the Capitol. An unknown number of brands paused the advertisements during that period.
Equivalent to
Facebook
(FB), Anderson warned Snap investors of an upcoming technical change to Apple’s mobile operating system (AAPL) that could hurt ad targeting. Anderson said it was not clear what impact the technical changes will have in the longer term.
Apple has said the change will help protect customer privacy, an argument that Facebook says is not real.
Despite the setbacks at the start of the year, Spiegel said Snap expects to make additional strides in profitability and increase revenue by more than 46%, the amount Snap last year sold year-round.
The company expects sales of $ 720 million to $ 740 million in the first quarter. Analysts modeled a first quarter adjusted loss of two cents a share on revenue of $ 705.1 million.
Write to Max A. Cherney at [email protected]