Snap Inc. Co-founder and CEO Evan Spiegel holds a Pixy drone while speaking during the Viva technology conference dedicated to innovation and startups at the Porte de Versailles exhibition center on June 17, 2022 in Paris, France.
Benoit Tessier | Reuters
suddenly Shares fell more than 16% after the company reported guidance for its current quarter that missed analysts’ expectations.
How the company did it:
- Loss per share: A 2 percent loss vs. a 4 percent loss expected by analysts, according to Refinitiv.
- Income: $1.07 billion vs. $1.05 billion expected, according to Refinitiv.
- Global Daily Active Users (DAUs): 397 million vs. 394.9 million expected, according to StreetAccount.
- Average revenue per user: $2.69 vs. $2.68 expected, according to StreetAccount.
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suddenly reported second-quarter results that topped analysts’ estimates but provided a weaker-than-expected forecast for the current period.
The company’s overall sales in the second quarter fell 4% from the $1.11 billion logged during the same period last year. This is the second straight round of year-over-year revenue declines.
The company managed to narrow its net loss by 11% year-on-year to $377.3 million in the second quarter ended June 30, 2023.
Snap also released financial guidance for the third quarter that it says is “built on the assumption” that the company’s daily active users will reach between 405 million and 406 million. As part of its guidance, Snap expects total sales between $1.07 billion and $1.13 billion for the third quarter, which translates to “flat year-over-year growth of negative 5%.”
Analysts were reporting Snap had third-quarter sales of $1.13 billion.
Last quarter, Snap did not provide official guidance for the second quarter, instead disclosing an “internal forecast” for revenue estimates in the period.
Like many tech companies, Snap embarked on a major cost-cutting plan in 2022 that included laying off 20% of the company’s then-6,400 workforce. Because of those cost cuts, Snap said in a letter to investors on Tuesday that its operating expenses fell 8% year-over-year to $615 million in the second quarter. As of June 30, 2023, the company had 5,286 full-time employees, according to the letter.
“We’re excited about the progress we’ve made in delivering greater return on investment for our advertising partners, growing our community to 397 million daily active users, and reaching more than 4 million Snapchat+ users,” Snap CEO Evan Spiegel said in a statement.
Snap announced its Snapchat+ subscription plan in June 2022, pitching it as a way for users to access exclusive features and updates for a monthly fee of $3.99.
Analysts are following Snap’s earnings for any sign of a recovery in the digital advertising market, which may be experiencing a modest rebound, according to several industry surveys. A recent William Blair SurveyFor example, it noted that while the overall online advertising market is “still soft,” the overall macro economy is “not as volatile, leading to a slowdown in digital ad spending.”
Meta reports its second-quarter results tomorrow, after the company’s revenue rose after three straight periods of first-quarter declines. At the time, Meta Chief Financial Officer Susan Lee said Meta would still face “a challenging regulatory environment” plus “a volatile macro environment” for the rest of the year.
Snap executives will address analysts and investors on an earnings call beginning at 5:30 pm ET.
Watch: Ad revenue, cost reduction and cloud will shape Google’s earnings.
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Source by [CNBC News]
