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The Zacks Consensus Estimate for revenues is currently pegged at $1.05 billion, indicating a 5.72% decline from the year-ago quarter’s reported figure.
The consensus mark for the bottom line has become narrower by 1 cent to a loss of 4 cents per share in the past 30 days.
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 first quarter, Snapchat’s subscriber growth, reflected by DAUs, increased 51 million on a year-over-year basis. DAUs at the end of the first quarter were 383 million, up 15.4% year over year.
The Snapchat+ subscription service reached more than 3 million paying subscribers in the first quarter. Features like Custom Story Expiration and Custom Notification Sounds are expected to have aided Snapchat+ subscriber growth in the to-be-reported quarter.
The Zacks Consensus Estimate for second-quarter global DAUs is currently pegged at 396 million, indicating growth of 14.1% from the year-ago quarter’s level. Geographically, estimates for DAUs in North America, Europe and ROW are currently pegged at 100.97 million, 94.74 million and 200.27 million, respectively.
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.
A steady yet slow ad-spending environment is expected to reflect on Snap’s second-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 (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.
Snap Boosts Features in My AI to Attract Users, Ad Dollars
In the to-be-reported quarter, SNAP announced that it is expanding its artificial intelligence (AI) chatbot, My AI, with the ability to create images. The chatbot will now be able to respond to users' messages with AI-generated images.
This update was announced at Snap’s annual Partner Summit. The company’s main focus is to use technology to boost its development of augmented reality (AR) features or create overlays on top of videos and images of the real world.
My AI was primarily launched for only Snapchat+ subscribers, paying $3.99 per month. It is now available at no cost for all Snapchat users.
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 second-quarter ARPU is pegged at $2.64, suggesting a decrease of 17.5% from the year-ago quarter’s reported figure.
META is pumping resources into developing generative AI on its platform. Recently, the company announced that it is making its AI large language model, Llama 2, available for commercial use through partnerships with major cloud providers including Microsoft (MSFT - Free Report) .
With this expanded partnership, Microsoft and Meta are supporting an open approach to provide increased access to foundational AI technologies to benefit businesses globally. Investments in AI are also expected to draw higher revenues from Meta’s ad business.
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.
Google is reportedly in discussions with prominent media houses, including The Washington Post, News Corp (owner of the Wall Street Journal) and The New York Times, to explore the potential of an AI tool called Genesis. The tool aims to assist journalists in writing news stories using AI.
Image: Bigstock
SNAP Gearing Up to Report Q2 Earnings: What's in the Cards?
Snap (SNAP - Free Report) is set to report second-quarter 2023 results on Jul 25.
The Zacks Consensus Estimate for revenues is currently pegged at $1.05 billion, indicating a 5.72% decline from the year-ago quarter’s reported figure.
The consensus mark for the bottom line has become narrower by 1 cent to a loss of 4 cents per share in the past 30 days.
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 first quarter, Snapchat’s subscriber growth, reflected by DAUs, increased 51 million on a year-over-year basis. DAUs at the end of the first quarter were 383 million, up 15.4% year over year.
The Snapchat+ subscription service reached more than 3 million paying subscribers in the first quarter. Features like Custom Story Expiration and Custom Notification Sounds are expected to have aided Snapchat+ subscriber growth in the to-be-reported quarter.
The Zacks Consensus Estimate for second-quarter global DAUs is currently pegged at 396 million, indicating growth of 14.1% from the year-ago quarter’s level. Geographically, estimates for DAUs in North America, Europe and ROW are currently pegged at 100.97 million, 94.74 million and 200.27 million, respectively.
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.
A steady yet slow ad-spending environment is expected to reflect on Snap’s second-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 (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.
Snap Boosts Features in My AI to Attract Users, Ad Dollars
In the to-be-reported quarter, SNAP announced that it is expanding its artificial intelligence (AI) chatbot, My AI, with the ability to create images. The chatbot will now be able to respond to users' messages with AI-generated images.
This update was announced at Snap’s annual Partner Summit. The company’s main focus is to use technology to boost its development of augmented reality (AR) features or create overlays on top of videos and images of the real world.
My AI was primarily launched for only Snapchat+ subscribers, paying $3.99 per month. It is now available at no cost for all Snapchat users.
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 second-quarter ARPU is pegged at $2.64, suggesting a decrease of 17.5% from the year-ago quarter’s reported figure.
META is pumping resources into developing generative AI on its platform. Recently, the company announced that it is making its AI large language model, Llama 2, available for commercial use through partnerships with major cloud providers including Microsoft (MSFT - Free Report) .
With this expanded partnership, Microsoft and Meta are supporting an open approach to provide increased access to foundational AI technologies to benefit businesses globally. Investments in AI are also expected to draw higher revenues from Meta’s ad business.
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.
Google is reportedly in discussions with prominent media houses, including The Washington Post, News Corp (owner of the Wall Street Journal) and The New York Times, to explore the potential of an AI tool called Genesis. The tool aims to assist journalists in writing news stories using AI.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.