Snap Posts Less Than Expected Loss, Shares Up By 1%

The owner of the application Snapchat, Snap, was able to beat analyst predictions, raising stock by around 11%. However, detailed analysis of the earnings report led to most of its stock rally falling, to close at just 1% above opening price.

Although Snapchat was able to mitigate it losses to less than predictions in Q1, the application also saw a growth in revenue from advertisements and user base.

In reality, the company had a loss of 10 cents per share, revenue of $320 million, a DAU of 190 million and an ARPU of $1.68.

CEO of Snap, Evan Spiegel has stated that good results and growth in revenue and DAU were delivered in the first quarter.

The user base has also risen to 190 million as opposed to 186 million from last quarter.

The share price of Snap has seen over a 100% rise after a phenomenal launch in 2019. Snap has also announced original shows, a gaming platform, several augmented reality updates and a new ad network. The release of the revamped Android app has also been completed.

Spiegel also added that with Snapchat being available on every device running Android, the user base of the app can be expected to increase.

Spiegel said that with billions of devices running Android capable of running an enhanced Snapchat experience, he was waiting and looking forward to new markets and their addition to the Snapchat community.

Twitter, which is a Snapchat rival, had strong earnings in Q1 as per its report, which sent the stock shooting by around 15% due to its higher-than-predicted user base increase and earnings growth.

However, analysts have advised caution over how Snapchat’s user base can be attractive to advertisers.

Brent Thrill from Jefferies voiced his concern whether proper monetization of the young millennial user base of Snap would be possible or not.

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