Will Snap Have More Bad News When It Reports Earnings?

07 February, 2018, 01:51 | Author: Barbara Daniel
  • Markets Insider

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 also added more users than expected, with daily active users rising almost 9m to 187m from the previous quarter. Vanguard Group Inc. now owns 8,353,729 shares of the company's stock worth $148,446,000 after acquiring an additional 1,601,170 shares in the last quarter.

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. Snap continues to have high spending, losing almost $350 million in the fourth quarter of 2017. This tool may also encourage Snapchat users to check the app more often, especially if you don't know how many direct messages you really have.

In Facebook's earnings call last week, Facebook CEO Mark Zuckerberg called WhatsApp and Instagram the two most-used Stories products in the world, and said, "Stories are on track to overtake posts in feed as the most common way that people share across all social apps".

The redesign has been rolled out to about 40 million users so far, according to Spiegel, with plans to expand it to all users by the end of the first quarter.

In related news, Director Mitchell Lasky sold 25,000 shares of the company's stock in a transaction dated Tuesday, November 21st. The company's revenue for the quarter was up 62.2% on a year-over-year basis.

Those design changes have put a bigger emphasis on user-to-user sharing, as opposed to content created by publishers and brands. The latest crumb of news to come out of Snap Inc. brings word that there's a new update for its other popular app, Bitmoji, offering tons of new styles.

"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.

Average revenue per user, a closely watched number, rose 46 percent to $1.53 in the final period of 2017, while a similar measure of costs grew much more slowly, according to the company.

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