Snap reported First quarter results on Thursday, which beat analysts’ estimates and showed a return to double-digit sales growth. Shares rose greater than 25% in prolonged trading.
This is how the corporate did it:
- Earnings per share: 3 cents adjusted versus LSEG’s expected lack of 5 cents
- Revenue: $1.19 billion versus LSEG’s expected $1.12 billion
- Global every day energetic users: 422 million versus 420 million expected, in accordance with StreetAccount
- Average income per user: According to StreetAccount, $2.83 versus expected $2.67
Snap’s first-quarter revenue rose 21% from $989 million in the identical period last yr. The company is growing rapidly after previously reporting six straight quarters of single-digit growth or revenue declines.
Snap has been working to rebuild its promoting business after the digital promoting market stalled in 2022, and it’s beginning to repay. In its letter to investors, Snap said the revenue growth was driven primarily by improvements to the corporate’s promoting platform in addition to demand for its direct response promoting solutions.
Advertising revenue was $1.11 billion in the primary quarter. Snap’s Other Revenue category, which is primarily generated by Snapchat+ subscribers, reached $87 million, up 194% year-over-year. Snap reported greater than 9 million Snapchat+ subscribers through the period.
According to StreetAccount, adjusted EBITDA was $46 million in the primary quarter, far exceeding analysts’ expected lack of $68 million. In its letter to investors, Snap said adjusted EBITDA “exceeded our expectations” and was primarily as a consequence of operating expense discipline and accelerated revenue growth.
“Given the progress we have made with our advertising platform, the leadership team we have built, and the strategic priorities we have set, we believe we are well positioned to further improve our business performance,” Snap wrote within the letter.
Although Snap’s growth accelerated, it still lagged behind Snap’s Meta, which reported 27% growth in its better-than-expected first-quarter results on Wednesday. Meta shares still tumbled after the corporate gave weak guidance and spooked investors with talk of its long-term investments.
Snap’s net loss for the quarter narrowed to $305.1 million, or a lack of 19 cents per share, compared with $328.7 million, or a lack of 21 cents per share, a yr ago.
According to StreetAccount, Snap expects second-quarter revenue between $1.23 billion and $1.26 billion, up from the $1.22 billion expected by analysts. Snap said adjusted EBITDA would fall between $15 million and $45 million, compared with Wall Street expectations of $15.5 million.
Snap reported 422 million every day energetic users (DAUs) in the primary quarter, up 10% yr over yr. The company expects to report around 431 million DAUs within the second quarter, in comparison with StreetAccount’s expected 430 million.
The company also provided guidance for its full-year 2024 cost structure. Snap said quarterly infrastructure costs per DAU will fall between 83 and 85 cents for the rest of the yr.
“We will continue to assess the level of our infrastructure investments based on what is in the best long-term interest of our business,” Snap said.
According to Snap, the period of time users spend watching content has increased yr over yr, largely as a consequence of engagement with Spotlight and Creator Stories. The company said time spent watching Spotlight, which aggregates content from users, increased 125% yr over yr.
In February, Snap announced it will lay off 10% of its global workforce, or about 500 employees. The company said Thursday that headcount and personnel costs will “increase moderately” over the rest of the yr.
Snap will hold its quarterly conference call with investors on Thursday at 5:30 p.m. ET.
