Snap’s first quarterly earnings reports were released yesterday, disappointing investors on revenues and user numbers.
The shares of Snapchat maker, Snap, shed a quarter of their value after the news was released.
The Rundown
- Revenue: $150 million vs $158 million – missed
- Global Daily Usage: 166 million vs 167.3 million – missed
- Average Revenue Per User: 90c – as expected
Snap’s Judgement: Is it a safe bet?
Revenues from last year have risen 286%. Meanwhile, daily active users soared 36%, even as Facebook (NASDAQ:FB) and Instagram copied some Snapchat’s signature features.
Average revenue per user (ARPU) climbed 181% from last year. However, from January to March ARPU dipped 14% – disappointing as these months are typically stronger for advertising thanks to holiday sales.
Net losses for the quarter came in at $2.2 billion, much of the loss can be afforded to the IPO release and stock-based compensation.
However, it is unlikely that Snap will turn a profit in the near future. The social media outlet is still funnelling a lot of capital into research and development, heavily focusing on improving the Android user’s experience.
Watch out for Snap at the US opening bell, the stock is gearing up for some volatility and posed to decrease to $18.09.