Snap stumbles after missing revenue expectations
Shares in Snap tumbled as much as 12 per cent in extended trading, after the Snapchat parent firm failed to meet analyst expectations for fourth-quarter sales.
Revenue for the three months to the end of December was reported at $560.9m, missing estimates of $563m as compiled by Refinitiv.
Global daily active users — a key growth metric for Snap — surprised investors to hit 218m versus the analyst forecast of 215m. However the average revenue per user slipped past expectations of $2.62, coming in at $2.58.
Snap’s net loss widened to $240.7m, or 17 cents per share, from $191.67m, or 14 cents per share, a year earlier.
“The strength in our core business gives us confidence in our long-term growth and profitability and we’re excited to build on these results in 2020 and beyond,” Snap chief executive Evan Spiegel said in a statement.
“Given the substantial long-term opportunities ahead, we are working hard to scale our revenue so that we are able to self-fund our investments in the future.”
Snap said expects to generate between $450m and $470m in revenue for the current quarter, ahead of analysts expectations of $462m.
“Despite Snap’s efforts to make the platform easier to buy, Facebook’s reach and ease of use continue to make it hard for advertisers to justify Snap (and other) investment,” said WPP Mindshare’s Jim Cridlin.
The company had earlier warned its peak advertising demand period, which runs between the Black Friday and December holidays, had one fewer week.