The CEO of Snap Inc. Evan Spiegel attends a morning session at the Allen & Company Sun Valley Conference on July 7, 2021 in Sun Valley, Idaho.
Kevin Dietsch | beautiful pictures
Snap missed Wall Street expectations for profits and sales and forecast disappointing revenue growth for the current quarter, when it reported first-quarter results on Thursday. However, daily users grew 18% year-over-year, more than expected.
Snap fell about 4% at one point before recovering to gain more than 10% at a time in volatile prolonged trading.
Here are the key numbers:
- Earnings per share: 2 cents loss vs 1 cent expected earnings, according to Refinitiv survey of analysts
- Turnover: $1.06 billion versus $1.07 billion expected, according to Refinitiv
- Global Daily Active Users (DAU): 332 million versus 330 million expected, according to StreetAccount, up 18% year-on-year
- Average revenue per user (ARPU): $3.20 versus $3.25 expected, according to StreetAccount, up 16.8% year over year
“The first quarter of 2022 proved more challenging than we expected,” Snap CEO Evan Spiegel said in a prepared statement.
Spiegel blamed some of Snap’s problems in the quarter on macroeconomic conditions, including advertisers halting their campaigns after Russia invaded Ukraine in February.
Snap said it expects June quarter revenue to grow between 20% and 25%, below Wall Street’s 28% estimate. It forecast daily users at around 344 million, well above expectations of 341.4 million.
The company said it estimates its adjusted EBITDA down from breakeven to $50 million in the second quarter.
Although the company’s overall revenue grew 38% year-over-year, Snap reported a larger net loss and less free cash flow on a year-over-year basis for the quarter ended March.
Snap CFO Derek Andersen said that other conditions affecting advertising clients include supply chain disruptions, labor shortages, inflation and the impact of rising interest rates.
Andersen said in his prepared remarks, Snap may continue to face a challenging operating environment that prompts clients to pause their campaigns or reduce ad budgets.
Snap is also facing challenges related to Apple’s 2021 privacy change that makes it more difficult to target and measure ads on iPhones. Andersen says that the tool the company created to fix this problem now accounts for 90% of the company’s direct response advertising revenue.
