Snap earnings (SNAP) quarter IV 2020

Snap shares fell more than 7% in trading after Thursday, after the company reported fourth-quarter earnings, despite exceeding Wall Street expectations in terms of earnings, revenue and user growth. But the company provided an adjusted EBITDA forecast in the first quarter, which was much lower than analysts’ consensus expectations.

Here is what they reported:

• Adjusted earnings per share: 9 cents compared to 7 cents per share forecast by Refinitiv
• Income: $ 911 million compared to $ 857.4 million forecast by Refinitiv
• Global Daily Active Users (SAD): 265 million compared to 257.79 million per set of invoices
• Average revenue per user (ARPU): $ 3.44 vs. $ 3.34 forecast by FactSet

Snap guided that it will lose between 50 and 70 million dollars based on adjusted EBITDA in the first quarter, quite shy of the expectations of the analysts’ consensus on an adjusted EBITDA profit of 19.3 million dollars, according to Refinitiv.

The company’s net loss fell to $ 113 million, down more than 53% from a net loss of $ 241 million last year.

Snap reported 265 million daily active users, up more than 6% from the company’s 249 million reported in October. This figure increases by almost 22% compared to the 218 million daily users that the company reported a year earlier.

Snap expects annual revenue growth of 56% to 60% for the first quarter, said Snap chief financial officer Derek Andersen in prepared comments. The company also expects to reach about 275 million DAU in the first quarter, Andersen said.

However, the company’s performance in the first quarter could be affected by two key factors. First, Andersen pointed out that Snap experienced two weeks of discontinuation of advertising demand, as branded advertisers interrupted campaigns in the run-up to the January 6 uprising in the US Chapter.

“That’s how we started the quarter slower than we would have expected otherwise,” Andersen said in his prepared remarks.

In addition, Andersen warned that Apple’s privacy changes to iOS 14, which are expected to take effect at the end of the first quarter, “pose another risk of discontinuation of demand.” These changes could affect the ability of social media companies to target ads to users.

“It is not yet clear what the long-term impact of these changes may be for the maximum momentum of our business, and this may not be clear until a few months or more after the changes are implemented,” Andersen said in his prepared remarks.

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