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Per the internal forecast, the company expects revenues between $1.32 billion and $1.375 billion, implying year-over-year growth of around 2% to 6%. Within this range of revenues, Snap estimates adjusted EBITDA between $65 million and $105 million.
The Zacks Consensus Estimate for revenues is currently pegged at $1.39 billion, indicating a 6.69% increase from the year-ago quarter’s reported figure.
The consensus mark for the bottom line has increased 16.7% to 7 cents per share in the past 30 days.
Snap’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 110%.
Let’s see how things have shaped up for the upcoming announcement.
Snap has been benefiting from a spike in the usage of Snapchat. The growing adoption of Snapchat among the Gen Z (13-24 years) population is expected to have driven Daily Active Users (DAUs), thus expanding the company’s advertiser base.
For the to-be-reported quarter, the company expects DAUs between 410 million and 412 million. In the third quarter, Snapchat’s subscriber growth, reflected by DAUs, increased 43 million on a year-over-year basis. DAUs, at the end of the third quarter, were 406 million, up 11.8% year over year.
The Zacks Consensus Estimate for fourth-quarter global DAUs is currently pegged at 412 million, indicating growth of 9.9% from the year-ago quarter’s level. Geographically, estimates for DAUs in North America, Europe and ROW are currently pegged at 101 million, 96 million and 214 million, respectively.
The Snapchat+ subscription service reached more than five million paying subscribers in the third quarter. Features like Custom Story Expiration and Custom Notification Sounds are expected to have aided Snapchat+ subscriber growth in the to-be-reported quarter.
On Nov 14, SNAP announced a partnership with Amazon (AMZN - Free Report) to enable Snapchat users in the United States to buy products from online retailers without leaving the app, making Snapchat more attractive for users and advertisers.
By partnering with Amazon, Snapchat aims to offer users a more integrated and convenient shopping experience, potentially driving more transactions through the platform.
With these recent launches, Snap has been democratizing its augmented reality (AR) tools that are likely to drive user growth.
In addition to the strong adoption of AR Lenses, the Discover content and Shows are expected to have driven user growth. The growing Snap Originals content is also expected to have bolstered user engagement for this Zacks Rank #3 (Hold) company. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Snap’s fourth-quarter ARPU is pegged at $3.35, suggesting a decrease of 3.5% from the year-ago quarter’s reported figure.
A steady yet slow ad-spending environment is expected to reflect on Snap’s fourth-quarter top-line numbers. Advertising has been the only source of revenues for the company, which has been facing significant competition from the likes of Meta Platforms (META - Free Report) and Alphabet for ad dollars. A persistent decline in the price-per-ad impression is likely to have dented advertising revenues for the company.
Snap Boosts AI Capabilities to Attract Users
SNAP is broadening its presence in the realm of generative artificial intelligence (AI) through the introduction of many AI-integrated features. More than 200 million people have used the company’s AI chatbot.
At the end of the third quarter, Snap announced a partnership with Microsoft (MSFT - Free Report) Advertising to power Sponsored Links within the AI-powered chatbot, My AI. Notably, My AI has garnered significant user engagement, with over 150 million people sending more than 10 billion messages to My AI.
This partnership leverages Microsoft Advertising's Ads for Chat API to enable the seamless delivery of relevant links during conversations. This collaboration is expected to help partners reach Snapchatters when they have expressed potential interest in their offerings.
In the to-be-reported quarter, SNAP rolled out some exciting AI-powered features for Snapchat+ subscribers globally, enhancing the creative possibilities for users.
Subscribers using the $3.99 plan can access the new AI image generator by clicking on the "AI" button on the right side of their screen. Users can choose from a selection of prompts or input their own text prompt.
The app generates an image based on the prompt, allowing users to edit, download and share the AI-generated image. This feature expands on the ability to create AI images for bitmoji backgrounds and chat wallpapers, now enabling users to share AI images with their friends.
The Dream selfie feature, which allows users to create fantastical images of themselves in different scenarios, can now be used with friends. Users can create an AI selfie and select a friend to appear in the generated image, opening up new possibilities for collaborative and imaginative content. Snapchat+ subscribers receive one free pack of eight Dreams per month.
The new AI-powered extend tool is designed to help users adjust their images. For example, if a user has taken a close-up image of their dog and wants to include more of the background, they can use the extend tool. The tool automatically generates a zoomed-out image, filling in the background with the help of AI.
These additions aim to provide its seven million Snapchat+ subscribers with more creative tools and options for personalizing their content.
Image: Bigstock
SNAP Gears Up to Report Q4 Earnings: What's in the Cards?
Snap (SNAP - Free Report) is set to report fourth-quarter 2023 results on Feb 6.
Per the internal forecast, the company expects revenues between $1.32 billion and $1.375 billion, implying year-over-year growth of around 2% to 6%. Within this range of revenues, Snap estimates adjusted EBITDA between $65 million and $105 million.
The Zacks Consensus Estimate for revenues is currently pegged at $1.39 billion, indicating a 6.69% increase from the year-ago quarter’s reported figure.
The consensus mark for the bottom line has increased 16.7% to 7 cents per share in the past 30 days.
Snap’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 110%.
Let’s see how things have shaped up for the upcoming announcement.
Snap Inc. Price and EPS Surprise
Snap Inc. price-eps-surprise | Snap Inc. Quote
Factors to Note
Snap has been benefiting from a spike in the usage of Snapchat. The growing adoption of Snapchat among the Gen Z (13-24 years) population is expected to have driven Daily Active Users (DAUs), thus expanding the company’s advertiser base.
For the to-be-reported quarter, the company expects DAUs between 410 million and 412 million. In the third quarter, Snapchat’s subscriber growth, reflected by DAUs, increased 43 million on a year-over-year basis. DAUs, at the end of the third quarter, were 406 million, up 11.8% year over year.
The Zacks Consensus Estimate for fourth-quarter global DAUs is currently pegged at 412 million, indicating growth of 9.9% from the year-ago quarter’s level. Geographically, estimates for DAUs in North America, Europe and ROW are currently pegged at 101 million, 96 million and 214 million, respectively.
The Snapchat+ subscription service reached more than five million paying subscribers in the third quarter. Features like Custom Story Expiration and Custom Notification Sounds are expected to have aided Snapchat+ subscriber growth in the to-be-reported quarter.
On Nov 14, SNAP announced a partnership with Amazon (AMZN - Free Report) to enable Snapchat users in the United States to buy products from online retailers without leaving the app, making Snapchat more attractive for users and advertisers.
By partnering with Amazon, Snapchat aims to offer users a more integrated and convenient shopping experience, potentially driving more transactions through the platform.
With these recent launches, Snap has been democratizing its augmented reality (AR) tools that are likely to drive user growth.
In addition to the strong adoption of AR Lenses, the Discover content and Shows are expected to have driven user growth. The growing Snap Originals content is also expected to have bolstered user engagement for this Zacks Rank #3 (Hold) company. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Snap’s fourth-quarter ARPU is pegged at $3.35, suggesting a decrease of 3.5% from the year-ago quarter’s reported figure.
A steady yet slow ad-spending environment is expected to reflect on Snap’s fourth-quarter top-line numbers. Advertising has been the only source of revenues for the company, which has been facing significant competition from the likes of Meta Platforms (META - Free Report) and Alphabet for ad dollars. A persistent decline in the price-per-ad impression is likely to have dented advertising revenues for the company.
Snap Boosts AI Capabilities to Attract Users
SNAP is broadening its presence in the realm of generative artificial intelligence (AI) through the introduction of many AI-integrated features. More than 200 million people have used the company’s AI chatbot.
At the end of the third quarter, Snap announced a partnership with Microsoft (MSFT - Free Report) Advertising to power Sponsored Links within the AI-powered chatbot, My AI. Notably, My AI has garnered significant user engagement, with over 150 million people sending more than 10 billion messages to My AI.
This partnership leverages Microsoft Advertising's Ads for Chat API to enable the seamless delivery of relevant links during conversations. This collaboration is expected to help partners reach Snapchatters when they have expressed potential interest in their offerings.
In the to-be-reported quarter, SNAP rolled out some exciting AI-powered features for Snapchat+ subscribers globally, enhancing the creative possibilities for users.
Subscribers using the $3.99 plan can access the new AI image generator by clicking on the "AI" button on the right side of their screen. Users can choose from a selection of prompts or input their own text prompt.
The app generates an image based on the prompt, allowing users to edit, download and share the AI-generated image. This feature expands on the ability to create AI images for bitmoji backgrounds and chat wallpapers, now enabling users to share AI images with their friends.
The Dream selfie feature, which allows users to create fantastical images of themselves in different scenarios, can now be used with friends. Users can create an AI selfie and select a friend to appear in the generated image, opening up new possibilities for collaborative and imaginative content. Snapchat+ subscribers receive one free pack of eight Dreams per month.
The new AI-powered extend tool is designed to help users adjust their images. For example, if a user has taken a close-up image of their dog and wants to include more of the background, they can use the extend tool. The tool automatically generates a zoomed-out image, filling in the background with the help of AI.
These additions aim to provide its seven million Snapchat+ subscribers with more creative tools and options for personalizing their content.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.