Snap Q1 EarningsSubscribe
As you guys might have known already, Snap just reported its first quarterly financial results.
And boy oh boy, all these short sellers are making a killing. Suffice to say, Snap screwed up. Shares are down more than 25 percent in after-hours trading.
The company spent $2.0 billion on stock-based compensation expenses after its initial public offering, widening net losses for the quarter to $2.2 billion.
Revenue: $150 million reported vs. $158 million expected by a Thomson Reuters consensus estimate.
Global DAUs: 166 million reported vs. 167.3 million expected by StreetAccount.
Analysts at Thomson Reuters estimate an adjusted loss of 20 cents per share, wider than the 19 cents expected.
What do you guys think about the future of Snap? They're actually trading around their initial valuation of $17 now; where do you see the prices going?
My opinion: I do think Snap has to really do something about Facebook and Google. The latter two are going to keep out-innovating Snap with their diversified businesses, and it would be interesting to see how Snap responses, especially as they just released new features before their earnings report today.
EDIT: Saw this interesting article at Seeking Alpha. Here's what Stone Fox Capital had to say:
The bigger issue was that revenues missed analyst targets of $158 million.
Still, the market can get past missing estimates with 286% revenue growth. The problem though is that Snap doubled the losses in the process.
The cleanest figure provided by the social company is the adjusted EBITDA number. Snap lost $188 million this year after losing $93 million last Q1. Snap has to triple revenues with minimal cost increases to reach breakeven EBITDA.
This scenario doesn't seem likely with minimal user growth. Snap saw DAUs grow to 166 million during Q1, up 5% sequentially for the quarter.