Snap Beats Analysts’ Estimates On Earnings, Revenue And User Growth, Reports First Profitable Quarter As A Public Company

Compared to its third-quarter earnings report that was hugely affected by Apple’s privacy update, Snap has reported a better-than-expected earnings report for its fourth quarter. The report which was released just a day after Facebook released its earnings report that failed to meet expectations alongside weak guidance, beat analyst expectations on earnings, revenue and user growth.

The company’s stock was down 23.6 percent before it reported its quarterly earnings and soared 62 percent after-hours after its quarterly announcement. It eventually balanced at 52 percent.

Snap reported earnings per share of 22 cents, adjusted, beating the 10 cents that analysts had expected, according to a survey by Refinitiv. Revenue for the quarter stood at $1.3 billion and surpassed analysts’ projection of $1.2 billion, according to Refinitiv.

Snap reported Global Daily Active Daily Users (DAUs) of 319 million. The estimate for this category by analysts was 316.9 million, according to StreetAccount. The Average Revenue per User (ARPU) was $4.06 surpassing the estimate of $3.79, according to StreetAccount.

Snap provided guidance of between $1.03 billion and $1.08 billion for the first quarter. According to Refinitiv, analysts forecasted $1.01 billion. Snap also expects daily active users in the first quarter to lie between 328 million and 330 million, also surpassing StreetAccount’s poll by analysts of 327.8 million.

In the third quarter, Snap’s ad business was hugely affected by Apple’s privacy update as it distributes its app on Apple’s iPhone and derives revenue via advertising content. According toSnap’s CFO Derek Anderson during a call with analysts, the company had recovered from the iOS update “quicker than we anticipated”. While speaking with analysts, he also mentioned that the company has been mindful to make privacy inherent to its products and as a result, the changes caused by the iOS changes are “likely to be experienced differently for our business than perhaps for others”.

The executive, however, still thinks that “it will take at least a couple more quarters for our advertising partners to build full confidence in our new measurement solutions”.

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