Snap Reports 10% Revenue Growth in Q4 Driven by In-App Optimizations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy SNAP?
Source: stocktwits
- Revenue Growth: Snap's Q4 revenue increased by 10% year-over-year to $1.72 billion, surpassing analysts' expectations of $1.7 billion, indicating positive outcomes from the company's pivot towards profitable growth.
- Profitability Improvement: Diluted net income per share rose to $0.03 from $0.01 a year ago, although it fell short of the $0.15 expected by analysts, reflecting ongoing efforts to enhance financial efficiency.
- Strong In-App Optimizations: Revenue from In-App Optimizations surged 89% year-over-year, driven by advancements in foundational app models, broader adoption of the App Power Pack, and the introduction of new immersive formats, showcasing Snap's success in product innovation.
- Strategic Future Investments: CEO Evan Spiegel noted that the strategic pivot not only facilitated revenue diversification and margin expansion but also emphasized continued investments in augmented reality and the consumer launch of Specs, demonstrating the company's commitment to future growth.
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Analyst Views on SNAP
Wall Street analysts forecast SNAP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for SNAP is 9.57 USD with a low forecast of 7.00 USD and a high forecast of 13.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
28 Analyst Rating
2 Buy
24 Hold
2 Sell
Hold
Current: 6.100
Low
7.00
Averages
9.57
High
13.00
Current: 6.100
Low
7.00
Averages
9.57
High
13.00
About SNAP
Snap Inc. is a technology company. Its flagship product, Snapchat, is a visual messaging application that enhances relationships with friends, family, and the world. Snapchat is the Company's core mobile device application and contains five tabs, complemented by additional tools that function outside the application. Snapchatters can interact with any or all the five tabs. Additionally, it offers Snapchat+, its subscription product that provides subscribers access to exclusive, experimental, and pre-release features. Snapchat+ offers a range of features, from allowing Snapchatters to customize the look and feel of their application, to giving special insights into their friendships. The Company also offers Snapchat for Web, a browser-based product that brings Snapchats calling and messaging capabilities to the Web. Its advertising products include AR Ads and Snap Ads. Snap Ads include Single Image or Video Ads, Story Ads, Collection Ads, Dynamic Ads, Commercials, and Sponsored Snaps.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Earnings Release Announcement: Snap Inc. is set to release its Q4 earnings after the market closes on February 4, with analysts predicting a loss of 3 cents per share, a significant decline from a profit of 1 cent per share a year ago, indicating mounting profitability pressures.
- Revenue Growth Expectations: Despite the anticipated loss, Snap's quarterly revenue is expected to reach $1.7 billion, up from $1.56 billion a year earlier, suggesting that the company still has some growth potential in terms of revenue.
- Subsidiary Formation: Snap recently announced the establishment of Specs Inc. as a distinct subsidiary, aimed at preparing for the public launch of AI-powered smart glasses, a strategic move that could open new revenue streams for the company.
- Stock Price Fluctuation: Snap's shares fell 8.4% to close at $6.10 on Tuesday, reflecting market concerns regarding the upcoming earnings report and future outlook, which may impact investor confidence.
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- Earnings Beat: Snap's Q4 earnings report exceeded market expectations, showcasing robust user growth and advertising revenue, which is likely to drive a stock rebound and bolster investor confidence.
- Buyback Plan: The company has approved a $500 million stock buyback program aimed at enhancing earnings per share and rewarding shareholders, reflecting management's confidence in the company's future performance.
- Partnership Strategy: Snap's collaboration with Perplexity signifies a strategic shift, which, while deviating from its core business, may provide new growth avenues in the future.
- Market Reaction: Despite the strong earnings report, Snap's stock declined ahead of the results, indicating market concerns over future uncertainties that could affect short-term investor sentiment.
See More
Snap Reports 10% Revenue Growth in Q4 Driven by In-App Optimizations
- Revenue Growth: Snap's Q4 revenue increased by 10% year-over-year to $1.72 billion, surpassing analysts' expectations of $1.7 billion, indicating positive outcomes from the company's pivot towards profitable growth.
- Profitability Improvement: Diluted net income per share rose to $0.03 from $0.01 a year ago, although it fell short of the $0.15 expected by analysts, reflecting ongoing efforts to enhance financial efficiency.
- Strong In-App Optimizations: Revenue from In-App Optimizations surged 89% year-over-year, driven by advancements in foundational app models, broader adoption of the App Power Pack, and the introduction of new immersive formats, showcasing Snap's success in product innovation.
- Strategic Future Investments: CEO Evan Spiegel noted that the strategic pivot not only facilitated revenue diversification and margin expansion but also emphasized continued investments in augmented reality and the consumer launch of Specs, demonstrating the company's commitment to future growth.
See More
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- Alphabet's Strong Earnings: Alphabet reported fourth-quarter earnings that exceeded expectations, with strong performance in revenue and Google Cloud, while YouTube ad revenue was $11.38 billion, slightly below the anticipated $11.84 billion, leading to a 1% stock increase.
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- Revenue and Profitability: The average revenue per user reached $3.62, surpassing the expected $3.56, demonstrating significant progress in enhancing user value and profitability, which is expected to further drive revenue growth in the future.
- Cash Flow and EBITDA Performance: Free cash flow surged 13% to $206 million, exceeding expectations of $183.8 million, while adjusted EBITDA jumped 30% to $358 million, showcasing the company's success in cost control and operational efficiency.
- Future Guidance and Buyback Plan: Snap guided for Q1 revenue between $1.50 billion and $1.53 billion, slightly below market expectations, and announced a stock buyback of up to $500 million of its Class A common stock, reflecting confidence in future growth and commitment to shareholder returns.
See More
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- Earnings Beat: Snap reported earnings of three cents per share in Q4, surpassing the market's expectation of a three-cent loss, indicating a significant improvement in profitability that boosts investor confidence.
- Revenue Growth: The company achieved quarterly revenue of $1.72 billion, a 10.21% increase from $1.557 billion in the same period last year, and exceeded analyst expectations of $1.702 billion, reflecting positive progress in revenue diversification.
- User Engagement Trends: While daily active users (DAU) fell slightly from 477,000 in Q3 to 474,000, global monthly active users (MAU) rose to 946 million, a 6% year-over-year increase, demonstrating ongoing expansion of the user base.
- Strategic Transformation Impact: CEO Evan Spiegel noted that Q4 results reflect the impact of the company's strategic pivot towards profitable growth, emphasizing continued investment in augmented reality and the consumer launch of Specs, signaling future growth potential.
See More
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- Earnings Release Announcement: Snap Inc. is set to release its Q4 earnings after the market closes on February 4, with analysts predicting a loss of 3 cents per share, a significant decline from a profit of 1 cent per share a year ago, indicating mounting profitability pressures.
- Revenue Growth Expectations: Despite the anticipated loss, Snap's quarterly revenue is expected to reach $1.7 billion, up from $1.56 billion a year earlier, suggesting that the company still has some growth potential in terms of revenue.
- Subsidiary Formation: Snap recently announced the establishment of Specs Inc. as a distinct subsidiary, aimed at preparing for the public launch of AI-powered smart glasses, a strategic move that could open new revenue streams for the company.
- Stock Price Fluctuation: Snap's shares fell 8.4% to close at $6.10 on Tuesday, reflecting market concerns regarding the upcoming earnings report and future outlook, which may impact investor confidence.
See More
Snap Exceeds Q4 Expectations and Approves $500M Buyback
- Earnings Beat: Snap's Q4 earnings report exceeded market expectations, showcasing robust user growth and advertising revenue, which is likely to drive a stock rebound and bolster investor confidence.
- Buyback Plan: The company has approved a $500 million stock buyback program aimed at enhancing earnings per share and rewarding shareholders, reflecting management's confidence in the company's future performance.
- Partnership Strategy: Snap's collaboration with Perplexity signifies a strategic shift, which, while deviating from its core business, may provide new growth avenues in the future.
- Market Reaction: Despite the strong earnings report, Snap's stock declined ahead of the results, indicating market concerns over future uncertainties that could affect short-term investor sentiment.
See More
Snap Reports 10% Revenue Growth in Q4 Driven by In-App Optimizations
- Revenue Growth: Snap's Q4 revenue increased by 10% year-over-year to $1.72 billion, surpassing analysts' expectations of $1.7 billion, indicating positive outcomes from the company's pivot towards profitable growth.
- Profitability Improvement: Diluted net income per share rose to $0.03 from $0.01 a year ago, although it fell short of the $0.15 expected by analysts, reflecting ongoing efforts to enhance financial efficiency.
- Strong In-App Optimizations: Revenue from In-App Optimizations surged 89% year-over-year, driven by advancements in foundational app models, broader adoption of the App Power Pack, and the introduction of new immersive formats, showcasing Snap's success in product innovation.
- Strategic Future Investments: CEO Evan Spiegel noted that the strategic pivot not only facilitated revenue diversification and margin expansion but also emphasized continued investments in augmented reality and the consumer launch of Specs, demonstrating the company's commitment to future growth.
See More
Qualcomm's Downgraded Forecast Causes Stock Plunge
- Qualcomm's Earnings Downgrade: Qualcomm's forecast was downgraded due to a global memory shortage, expecting adjusted earnings between $2.45 and $2.65 per share and revenue of $10.2 billion to $11 billion, significantly below analysts' expectations of $11.11 billion, resulting in an over 8% stock drop.
- Alphabet's Strong Earnings: Alphabet reported fourth-quarter earnings that exceeded expectations, with strong performance in revenue and Google Cloud, while YouTube ad revenue was $11.38 billion, slightly below the anticipated $11.84 billion, leading to a 1% stock increase.
- Boot Barn Raises Guidance: Boot Barn raised its full-year earnings guidance to $7.25 to $7.35 per share, surpassing the consensus estimate of $7.31, which contributed to a 5% increase in its stock price.
- Align Technology's Impressive Results: Align Technology reported fourth-quarter earnings of $3.29 per share, exceeding the LSEG consensus estimate of $2.97, with revenue of $1.05 billion also surpassing expectations, resulting in a stock surge of over 11%.
See More
Snap Inc. Reports Strong Q4 Metrics, Shares Rise 8%
- User Growth Metrics: Snap reported 474 million daily active users in Q4, an increase of 21 million year-over-year but a decrease of 3 million sequentially, aligning closely with the consensus estimate of 477 million, indicating stability in its user base and ongoing market demand.
- Revenue and Profitability: The average revenue per user reached $3.62, surpassing the expected $3.56, demonstrating significant progress in enhancing user value and profitability, which is expected to further drive revenue growth in the future.
- Cash Flow and EBITDA Performance: Free cash flow surged 13% to $206 million, exceeding expectations of $183.8 million, while adjusted EBITDA jumped 30% to $358 million, showcasing the company's success in cost control and operational efficiency.
- Future Guidance and Buyback Plan: Snap guided for Q1 revenue between $1.50 billion and $1.53 billion, slightly below market expectations, and announced a stock buyback of up to $500 million of its Class A common stock, reflecting confidence in future growth and commitment to shareholder returns.
See More
Snap Reports Q4 Earnings Beat Estimates, Stock Rises
- Earnings Beat: Snap reported earnings of three cents per share in Q4, surpassing the market's expectation of a three-cent loss, indicating a significant improvement in profitability that boosts investor confidence.
- Revenue Growth: The company achieved quarterly revenue of $1.72 billion, a 10.21% increase from $1.557 billion in the same period last year, and exceeded analyst expectations of $1.702 billion, reflecting positive progress in revenue diversification.
- User Engagement Trends: While daily active users (DAU) fell slightly from 477,000 in Q3 to 474,000, global monthly active users (MAU) rose to 946 million, a 6% year-over-year increase, demonstrating ongoing expansion of the user base.
- Strategic Transformation Impact: CEO Evan Spiegel noted that Q4 results reflect the impact of the company's strategic pivot towards profitable growth, emphasizing continued investment in augmented reality and the consumer launch of Specs, signaling future growth potential.
See More
