Snap slightly misses on earnings due to difficult macroeconomic conditions

Snap slightly misses on earnings due to difficult macroeconomic conditions

Posted on

Shares in Snap Inc. share went on a rollercoaster ride in late trading today after only slightly missing analyst expectations in its latest quarterly earnings report.

For the quarter ending March 31, Snap reported a non-generally accepted accounting principles loss of two cents per share compared to breakeven in the same quarter of last year and a one-cent per-share profit in the previous quarter. Revenue came in at $1.06 billion, up 38% year-over-year.

Analysts had expected an EPS loss of one cent on revenue of $1.07 billion.

Snap’s lower-than-expected numbers, be it not missing by a lot, were due to lower revenue per user. The lower ARPU was blamed on difficult macroeconomic conditions, including advertisers pausing campaigns following the Russian invasion of Ukraine.

The average revenue per user came in a $3.20 in the month, up 16.8% compared to the same quarter last year but lower than an expected figure of $3.25. Global daily active users grew 18% year-over-year to 332 million, ahead of the 330 million expected by analysts.

Operating cash flow in the quarter came in at $127 million, compared to $137 million the prior year, while free cash flow came in at $106 million compared to $126 million.

Highlights in the quarter included over 250 million Snapchat users engaging with augmented reality every day on average. The company’s Valentine’s Day Lenses were viewed over nine billion times, more than twice as much as last year.

Snapchat users aged 25 and over – Snapchat is better known for its younger audience – engaging with shows and publisher content increased by more than 25% year-over-year and 10 million viewers and watched “Breakwater,” a Snap Original about a dystopian future.

“Our first-quarter results reflect the underlying momentum in our business through a challenging operating environment, Evan Spiegel, chief executive officer of Snap, said in a statement. “We remain focused on providing value for our growing community, delivering ROI for our advertising partners and investing against our enormous opportunity in augmented reality.

Looking forward, Snap predicted adjusted earnings before interest, taxation, depreciation and amortization of between breakeven and $50 million in its second-quarter on year-over-year revenue growth of between 20% and 25%.

The headline figures may have been a narrow miss for Snap, but investors were not harsh on the company, be it initially not quite sure what to make of them. Snap shares were down as much as 7% after the earnings release, then flipped around and were nearly 5% up. The price subsequently settled, with Snap up 0.78% to $29.65 as of 7:52 p.m. EDT.

Barrons reports that the market noted that Snap’s results are possibly reflective of what to expect as earnings season kicks off for the social media industry. Shares in Meta Inc. and Twitter Inc. were up slightly after Snap’s results were released.

Image: Blogtrepreneur/Flickr

Show your support for our mission by joining our Cube Club and Cube Event Community of experts. Join the community that includes Amazon Web Services and CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger and many more luminaries and experts.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *