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Snap (SNAP - Free Report) reported second-quarter 2023 loss of 2 cents per share, beating the Zacks Consensus Estimate by 50%. The metric remained unchanged year over year.
Revenues declined 3.9% year over year to $1068 million, which beat the Zacks Consensus Estimate by 1.94%.
Daily active users (DAU) at the end of the reported quarter were 397 million, up 14.4% year over year. Snap added 50 million DAU on a year-over-year basis.
Geographically, revenues from North America (64.3% of revenues) decreased 12.6% year over year to $687 million. Revenues from Europe (17%) increased 7.1% to $182 million. Rest of the World (ROW) revenues were $198 million, up 27.7% year over year.
The average revenue per user (ARPU) decreased 15.9% year over year to $2.69. On a year-over-year basis, ARPUs of North America and Europe decreased 13.9% and 2.5%, respectively, while ARPU of ROW increased 2.1%.
Improvement of User Engagement in the Second Quarter
North America DAU was 101 million, up 2% year over year. Europe DAU was 94 million, up 9.3% year over year and ROW DAU was 202 million at the end of the reported quarter, up 24.7% year over year.
In the second quarter, Snap added new publisher deals and renewed agreements with ITV in the U.K., ProSieben in Germany, Network 18 in India and ESPN in the Netherlands.
The Snapchat+ subscription service reached more than 4 million paying subscribers in the second quarter. The company made considerable progress in diversifying revenues with Snapchat+, ARES and sponsored AR advertising.
The Snap Map is a personalized experience to view content, discover places and see what your friends are up to with the aim of increasing engagement. The Map is used by more than 350 million Snapchatters on a monthly basis.
Operating Details
In the quarter under review, the cost of revenues on a non-GAAP basis increased 11.3% year over year to $496.9 million.
Adjusted operating expenses were $975.1 million, down 8.5% year over year.
Sales and marketing expenses decreased 9.9% year over year to $280.6 million and general and administrative expenses declined 12.9% year over year to $216.9 million. Research and development expenses contracted 5.4% year over year to $477.7 million.
Adjusted EBITDA was negative $38 million, down 642.9% from the year-ago quarter.
Balance Sheet and Cash Flow
As of Jun 30, 2023, cash and cash equivalents and marketable securities were $3.7 billion compared with $4.1 billion as of Mar 31, 2023.
Operating cash flow was negative $82 million in the second quarter of 2023 compared with negative $124 million in the year-ago quarter.
Free cash flow was negative $119 million in the second quarter of 2023 compared with negative $147 million in the previous quarter.
Zacks Rank & Stocks to Consider
Snap currently carries a Zacks Rank #3 (Hold).
Shares of Snap have gained 31% compared with the Zacks Computer and Technology sector’s rise of 20% in the past year.
Investors interested in the broader Zacks Computer & Technology sector can consider better-ranked stocks like Salesforce (CRM - Free Report) , NVIDIA Corporation (NVDA - Free Report) and Meta Platforms (META - Free Report) . While Salesforce and NVIDIA sport a Zacks Rank #1 (Strong Buy), Meta carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Salesforce’s second-quarter fiscal 2024 earnings has been revised northward by a penny to $1.90 per share over the past 30 days. For fiscal 2024, earnings estimates have moved up by 2 cents to $7.44 in the past 30 days.
CRM's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 15.5%. Shares of the company have gained 23% in the past year.
The Zacks Consensus Estimate for NVIDIA’s second-quarter fiscal 2024 earnings has been revised northward from $1.04 to $2.04 per share over the past 60 days. For fiscal 2024, earnings estimates have moved up by 2 cents to $7.66 in the past 30 days.
NVDA's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 0.26%. Shares of the company have soared 151.8% in the past year.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 earnings has been revised upward by a penny to $2.83 per share over the past seven days. For 2023, earnings estimates have moved north by 3 cents to $11.97 in the past seven days.
META’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 15.5%. Shares of the company have surged 65.1% in the past year.
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SNAP's Q2 Earnings Surpass Estimates, Revenues Decline Y/Y
Snap (SNAP - Free Report) reported second-quarter 2023 loss of 2 cents per share, beating the Zacks Consensus Estimate by 50%. The metric remained unchanged year over year.
Revenues declined 3.9% year over year to $1068 million, which beat the Zacks Consensus Estimate by 1.94%.
Daily active users (DAU) at the end of the reported quarter were 397 million, up 14.4% year over year. Snap added 50 million DAU on a year-over-year basis.
Geographically, revenues from North America (64.3% of revenues) decreased 12.6% year over year to $687 million. Revenues from Europe (17%) increased 7.1% to $182 million. Rest of the World (ROW) revenues were $198 million, up 27.7% year over year.
The average revenue per user (ARPU) decreased 15.9% year over year to $2.69. On a year-over-year basis, ARPUs of North America and Europe decreased 13.9% and 2.5%, respectively, while ARPU of ROW increased 2.1%.
Snap Inc. Price, Consensus and EPS Surprise
Snap Inc. price-consensus-eps-surprise-chart | Snap Inc. Quote
Improvement of User Engagement in the Second Quarter
North America DAU was 101 million, up 2% year over year. Europe DAU was 94 million, up 9.3% year over year and ROW DAU was 202 million at the end of the reported quarter, up 24.7% year over year.
In the second quarter, Snap added new publisher deals and renewed agreements with ITV in the U.K., ProSieben in Germany, Network 18 in India and ESPN in the Netherlands.
The Snapchat+ subscription service reached more than 4 million paying subscribers in the second quarter. The company made considerable progress in diversifying revenues with Snapchat+, ARES and sponsored AR advertising.
The Snap Map is a personalized experience to view content, discover places and see what your friends are up to with the aim of increasing engagement. The Map is used by more than 350 million Snapchatters on a monthly basis.
Operating Details
In the quarter under review, the cost of revenues on a non-GAAP basis increased 11.3% year over year to $496.9 million.
Adjusted operating expenses were $975.1 million, down 8.5% year over year.
Sales and marketing expenses decreased 9.9% year over year to $280.6 million and general and administrative expenses declined 12.9% year over year to $216.9 million. Research and development expenses contracted 5.4% year over year to $477.7 million.
Adjusted EBITDA was negative $38 million, down 642.9% from the year-ago quarter.
Balance Sheet and Cash Flow
As of Jun 30, 2023, cash and cash equivalents and marketable securities were $3.7 billion compared with $4.1 billion as of Mar 31, 2023.
Operating cash flow was negative $82 million in the second quarter of 2023 compared with negative $124 million in the year-ago quarter.
Free cash flow was negative $119 million in the second quarter of 2023 compared with negative $147 million in the previous quarter.
Zacks Rank & Stocks to Consider
Snap currently carries a Zacks Rank #3 (Hold).
Shares of Snap have gained 31% compared with the Zacks Computer and Technology sector’s rise of 20% in the past year.
Investors interested in the broader Zacks Computer & Technology sector can consider better-ranked stocks like Salesforce (CRM - Free Report) , NVIDIA Corporation (NVDA - Free Report) and Meta Platforms (META - Free Report) . While Salesforce and NVIDIA sport a Zacks Rank #1 (Strong Buy), Meta carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Salesforce’s second-quarter fiscal 2024 earnings has been revised northward by a penny to $1.90 per share over the past 30 days. For fiscal 2024, earnings estimates have moved up by 2 cents to $7.44 in the past 30 days.
CRM's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 15.5%. Shares of the company have gained 23% in the past year.
The Zacks Consensus Estimate for NVIDIA’s second-quarter fiscal 2024 earnings has been revised northward from $1.04 to $2.04 per share over the past 60 days. For fiscal 2024, earnings estimates have moved up by 2 cents to $7.66 in the past 30 days.
NVDA's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 0.26%. Shares of the company have soared 151.8% in the past year.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 earnings has been revised upward by a penny to $2.83 per share over the past seven days. For 2023, earnings estimates have moved north by 3 cents to $11.97 in the past seven days.
META’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 15.5%. Shares of the company have surged 65.1% in the past year.