Published: Wed, February 07, 2018
Finance | By Cynthia Curry

SunTrust Banks Weighs in on Snap Inc's FY2022 Earnings (SNAP)

SunTrust Banks Weighs in on Snap Inc's FY2022 Earnings (SNAP)

It's now been almost a year since Snap went public, and it has been plagued by the same problems each quarter: slowing user growth, fierce competition from Instagram, and no clear path to profitability.

Snap's good news extended to usage metrics, with Snapchat adding 8.9 million daily active users in Q4 - the highest net addition since Q3 of 2016.

Analysts had expected losses of $409 million, and revenue of around $253 million.

Snap shares soared by about 20 percent Tuesday on the strength of its unexpectedly upbeat quarterly report.

Snap said the average revenue per user rose 46 percent from a year ago to $1.53, offering some hope for reaching profitability.

The company has also suffered from unfavorable comparisons to Facebook Inc.'s Instagram, which is rapidly expanding and aggressively copying Snapchat's most-popular features.

Investors, who had been expecting revenue of $255 million and a loss of 33 cents per share, sent the stock soaring on the strong earnings beat. It reported an adjusted loss of 13 cents a share, beating the consensus estimate for a 16-cent loss. He also writes at length about the Snapchat redesign.

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If signed into law, the legislation sets fines or a maximum three years imprisonment for anyone found guilty of violating it. State Department has said the U.S. opposes the legislation, saying it could "undermine free speech".

"Our work during 2017 is proof that we aren't afraid to make big changes for the long-term success of our business", Spiegel said in his prepared remarks.

In the year since it went public, Snap has struggled to grow. But the company's bet on Spectacles has been expensive, costing the company $40 million last quarter for "excess inventory". Squali anticipates that the company will post earnings per share of $0.16 for the year.

Snap shares were up 26%, near 17.70, in after-hours trading on the stock market today.

Facebook and Instagram may have successfully borrowed a lot of Snap's designs, but it still has a few tricks up its sleeves.

"We continue to view Snap's audience and platform as a unique asset in the digital-media space with a long monetization runway", said John Egbert, an analyst at Stifel Nicolaus, in a note to investors before the results.

Even though Snap wasn't vocal about its release, Snapchat's new Do Not Disturb comes at a time when more people in the tech industry are talking about smartphone addiction.

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