February 24, 2024
London, UK

Snap (SNAP) Third Quarter Earnings Disappoints

Snap

Snap reported the third quarter of 2022 financial results and no forward guidance disappointing investors

Snap revenue increased by 6% at $1.13 billion below the expectations of $1.14 billion.  

The adjusted Earnings per share (EPS) came at $0.8, well above the expectations of$0.01. Despite the adjusted profit, the net loss for the quarter was $360 million due to $155 million in restructuring costs that were announced back in August. 

The Daily Active Users (DAUs) metric increased by 19% to 363 million topping the analyst’s forecast of 358.2 million. The daily active users (DAUs) increased in Europe, North America and the Rest of the World.

The time spent watching Spotlight content increased 55% in the third quarter The company reported time spent watching Spotlight content was up 55% year-over-year in the third quarter. The daily average time spent for Snapchatters 35 and publisher content grow by 40%.

Disappointment came from the Average revenue per user (ARPU) which dropped 11% to $3.11 per user.  

Snap also announced that has authorized a stock repurchase program of US$500 million of its Class A common stock.

The company ended the Q3 with $4.4 billion in cash.

Snap will not provide forward guidance on revenue or adjusted EBITDA for Q4, and that is not good news for the stock.

Snap Price

Snap closed the trading session 0.64% lower at $10.79 but in the after-market trading, the stock is 25.86% lower at $8. Snap stock has been very volatile after the financial results announcements with huge moves that reached, -39%, + 59%, -27% in the three last quarterly reports.

The stock hit an all-time high at $83.34 on September 24, 2021. The stock has lost over 77% since the beginning of the year and 87% from all-time highs. Snap capitalization stands at 17.91 billion.  The technical picture continues its bearish formation targeting the 2020 low.

Piper Sandler Reiterated SNAP at Neutral and raised the price target from $11 to $12 on September 27, 2022.

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