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SNAP Gearing Up to Report Q1 Earnings: What's in the Cards?
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Snap (SNAP - Free Report) is set to report first-quarter 2023 results on Apr 27.
The Zacks Consensus Estimate for revenues is currently pegged at $1.01 billion, indicating a 5.42% decline from the year-ago quarter’s reported figure.
The consensus mark for the bottom line has been steady at a loss of 1 cent per share, indicating 50% growth from the year-ago quarter’s reported figure.
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.
In the fourth quarter, Snapchat’s subscriber growth, reflected by DAUs, increased 56 million on a year-over-year basis. DAUs at the end of the fourth quarter were 375 million, up 17.6% year over year.
The Zacks Consensus Estimate for first-quarter global DAUs is currently pegged at 384 million, indicating growth of 15.7% from the year-ago quarter level.
The Snapchat+ subscription service reached more than 2 million paying subscribers in the fourth quarter. Snap launched new features, such as Custom Story Expiration and Custom Notification Sounds, providing subscribers with more than 12 exclusive features which is expected to have aided Snapchat+ subscriber growth in the to-be-reported quarter.
SNAP has been focused on continuously adding innovative features like Lens Studio 2.0, Camera Kit, Snap Minis and Bitmoji for games, making Snapchat more attractive for users and advertisers.
In the to-be-reported quarter, Snap announced the launch of ARES, a new enterprise solution to enable businesses to integrate Snap's augmented reality (AR) into its owned and operated channels with ease and at scale.
With these recent launches, Snap has been democratizing its 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 first-quarter ARPU is pegged at $2.62, suggesting a decrease of 18.1% from the year-ago quarter’s reported figure.
A steady yet slow ad-spending environment is expected to reflect on Snap’s first-quarter top-line numbers. Advertising has been the only source of revenues for Snap, which has been facing significant competition from the likes of Meta Platforms (META - Free Report) and Alphabet (GOOGL - Free Report) for ad dollars. A persistent decline in the price-per-ad impression is likely to have dented advertising revenues for the company.
META is pumping resources into developing artificial intelligence (AI) to address solutions for megatrends like a hybrid work environment, which will drive its user base across various platforms like Meta Portal Go. Investments in AI are also expected to draw higher revenues from Meta’s ad business.
In the to-be reported quarter, Snap launched My AI, a chatbot that has the latest version of Microsoft (MSFT - Free Report) backed OpenAI’s GPT as an experimental feature for Snapchat+ subscribers. The primary difference between ChatGPT and Snapchat’s version is that the Snapchat version is more restrictive and adhering to the company’s safety and trust guidelines. SNAP is also giving competition to META in the metaverse space. It collaborated with Vogue to feature a virtual try-on experience of select pieces from Balenciaga, Dior and Gucci, which will be available for snapchatters globally.
In its race to target TV ad dollars, Alphabet allowed third-party (Nielsen and comScore) tagging of YouTube videos to determine the effectiveness of ads on YouTube versus ads shown on TV. The Google Preferred program pulls out the top 5% of the most engaging content on YouTube for advertisers. Alphabet has also promised to advertise this content itself in order to boost traffic. Google Preferred is attracting spending on the platform.
Image: Bigstock
SNAP Gearing Up to Report Q1 Earnings: What's in the Cards?
Snap (SNAP - Free Report) is set to report first-quarter 2023 results on Apr 27.
The Zacks Consensus Estimate for revenues is currently pegged at $1.01 billion, indicating a 5.42% decline from the year-ago quarter’s reported figure.
The consensus mark for the bottom line has been steady at a loss of 1 cent per share, indicating 50% growth from the year-ago quarter’s reported figure.
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.
In the fourth quarter, Snapchat’s subscriber growth, reflected by DAUs, increased 56 million on a year-over-year basis. DAUs at the end of the fourth quarter were 375 million, up 17.6% year over year.
The Zacks Consensus Estimate for first-quarter global DAUs is currently pegged at 384 million, indicating growth of 15.7% from the year-ago quarter level.
The Snapchat+ subscription service reached more than 2 million paying subscribers in the fourth quarter. Snap launched new features, such as Custom Story Expiration and Custom Notification Sounds, providing subscribers with more than 12 exclusive features which is expected to have aided Snapchat+ subscriber growth in the to-be-reported quarter.
SNAP has been focused on continuously adding innovative features like Lens Studio 2.0, Camera Kit, Snap Minis and Bitmoji for games, making Snapchat more attractive for users and advertisers.
In the to-be-reported quarter, Snap announced the launch of ARES, a new enterprise solution to enable businesses to integrate Snap's augmented reality (AR) into its owned and operated channels with ease and at scale.
With these recent launches, Snap has been democratizing its 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 first-quarter ARPU is pegged at $2.62, suggesting a decrease of 18.1% from the year-ago quarter’s reported figure.
A steady yet slow ad-spending environment is expected to reflect on Snap’s first-quarter top-line numbers. Advertising has been the only source of revenues for Snap, which has been facing significant competition from the likes of Meta Platforms (META - Free Report) and Alphabet (GOOGL - Free Report) for ad dollars. A persistent decline in the price-per-ad impression is likely to have dented advertising revenues for the company.
META is pumping resources into developing artificial intelligence (AI) to address solutions for megatrends like a hybrid work environment, which will drive its user base across various platforms like Meta Portal Go. Investments in AI are also expected to draw higher revenues from Meta’s ad business.
In the to-be reported quarter, Snap launched My AI, a chatbot that has the latest version of Microsoft (MSFT - Free Report) backed OpenAI’s GPT as an experimental feature for Snapchat+ subscribers. The primary difference between ChatGPT and Snapchat’s version is that the Snapchat version is more restrictive and adhering to the company’s safety and trust guidelines. SNAP is also giving competition to META in the metaverse space. It collaborated with Vogue to feature a virtual try-on experience of select pieces from Balenciaga, Dior and Gucci, which will be available for snapchatters globally.
In its race to target TV ad dollars, Alphabet allowed third-party (Nielsen and comScore) tagging of YouTube videos to determine the effectiveness of ads on YouTube versus ads shown on TV. The Google Preferred program pulls out the top 5% of the most engaging content on YouTube for advertisers. Alphabet has also promised to advertise this content itself in order to boost traffic. Google Preferred is attracting spending on the platform.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.