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Snap (SNAP - Free Report) reported first-quarter 2024 earnings of 3 cents per share, which beat the Zacks Consensus Estimate by 160% and increased 200% year over year.
Revenues increased 20.9% year over year to $1.19 billion and beat the Zacks Consensus Estimate by 6.79%.
Daily active users (DAU) at the end of the reported quarter were 422 million, up 10.2% year over year. Snap added 39 million DAU on a year-over-year basis.
Geographically, revenues from North America (62.2% of revenues) increased 16.1% year over year to $743.13 million. Revenues from Europe (16.4% of revenues) increased 24.1% to $195.8 million. Revenues from Rest of the World (ROW) were $255.8 million, up 34% year over year.
The average revenue per user (ARPU) increased 13% year over year to $1.13. On a year-over-year basis, the ARPU of North America, Europe and ROW climbed 16.8%, 20% and 13%, respectively.
Improvement of User Engagement in the Third Quarter
North America’s DAU was 100 million, flat year over year. Europe’s DAU was 96 million, up 3.2% year over year. ROW’s DAU was 226 million at the end of the reported quarter, which jumped 18.9% year over year.
In the first quarter, Snap partnered with Traackr, Lumen Research, OMD, Amplified Intelligence and Fospha to empower advertisers with more campaign tools and insights.
The Snapchat+ subscription service reached more than nine million paying subscribers in the first quarter. The company made considerable progress in diversifying revenues with Snapchat+, ARES and sponsored AR advertising.
More creators posted content on Snapchat, with total Public Stories posted by Snap Stars growing more than 55% year over year in first-quarter 2024 in the United States.
Operating Details
In the quarter under review, the cost of revenues on a non-GAAP basis increased 30.6% year over year to $574.7 million.
Adjusted operating expenses were $953.3 million, up 4.3% year over year.
Sales and marketing expenses increased 2.8% year over year to $276 million, and general and administrative expenses jumped 19.5% year over year to $227.5 million. Research and development expenses contracted 1.2% year over year to $449.8 million.
Adjusted EBITDA was $45.7 million, up from $1 million reported in the year-ago quarter.
Balance Sheet and Cash Flow
As of Mar 31, 2024, cash and cash equivalents and marketable securities were $2.9 billion compared with $3.5 billion as of Dec 31, 2023.
Operating cash flow was $88 million in the first quarter of 2024 compared with $151 million reported in the year-ago quarter.
Free cash flow was $38 million compared with $103 million reported in the year-ago quarter.
The company repurchased 21 million shares at a cost of $235 million in the first quarter, reflecting an average share repurchase price of $11.19.
Guidance
For second-quarter 2024, Snap expects total revenues between $1.225 billion and $1.255 billion. Adjusted EBITDA is expected between $15 million and $45 million.
DAU is projected to be 431 million in the second quarter.
Image: Bigstock
SNAP Q1 Earnings Surpass Estimates, Revenues Increase Y/Y
Snap (SNAP - Free Report) reported first-quarter 2024 earnings of 3 cents per share, which beat the Zacks Consensus Estimate by 160% and increased 200% year over year.
Revenues increased 20.9% year over year to $1.19 billion and beat the Zacks Consensus Estimate by 6.79%.
Daily active users (DAU) at the end of the reported quarter were 422 million, up 10.2% year over year. Snap added 39 million DAU on a year-over-year basis.
Geographically, revenues from North America (62.2% of revenues) increased 16.1% year over year to $743.13 million. Revenues from Europe (16.4% of revenues) increased 24.1% to $195.8 million. Revenues from Rest of the World (ROW) were $255.8 million, up 34% year over year.
The average revenue per user (ARPU) increased 13% year over year to $1.13. On a year-over-year basis, the ARPU of North America, Europe and ROW climbed 16.8%, 20% and 13%, respectively.
Snap Inc. Price, Consensus and EPS Surprise
Snap Inc. price-consensus-eps-surprise-chart | Snap Inc. Quote
Improvement of User Engagement in the Third Quarter
North America’s DAU was 100 million, flat year over year. Europe’s DAU was 96 million, up 3.2% year over year. ROW’s DAU was 226 million at the end of the reported quarter, which jumped 18.9% year over year.
In the first quarter, Snap partnered with Traackr, Lumen Research, OMD, Amplified Intelligence and Fospha to empower advertisers with more campaign tools and insights.
The Snapchat+ subscription service reached more than nine million paying subscribers in the first quarter. The company made considerable progress in diversifying revenues with Snapchat+, ARES and sponsored AR advertising.
More creators posted content on Snapchat, with total Public Stories posted by Snap Stars growing more than 55% year over year in first-quarter 2024 in the United States.
Operating Details
In the quarter under review, the cost of revenues on a non-GAAP basis increased 30.6% year over year to $574.7 million.
Adjusted operating expenses were $953.3 million, up 4.3% year over year.
Sales and marketing expenses increased 2.8% year over year to $276 million, and general and administrative expenses jumped 19.5% year over year to $227.5 million. Research and development expenses contracted 1.2% year over year to $449.8 million.
Adjusted EBITDA was $45.7 million, up from $1 million reported in the year-ago quarter.
Balance Sheet and Cash Flow
As of Mar 31, 2024, cash and cash equivalents and marketable securities were $2.9 billion compared with $3.5 billion as of Dec 31, 2023.
Operating cash flow was $88 million in the first quarter of 2024 compared with $151 million reported in the year-ago quarter.
Free cash flow was $38 million compared with $103 million reported in the year-ago quarter.
The company repurchased 21 million shares at a cost of $235 million in the first quarter, reflecting an average share repurchase price of $11.19.
Guidance
For second-quarter 2024, Snap expects total revenues between $1.225 billion and $1.255 billion. Adjusted EBITDA is expected between $15 million and $45 million.
DAU is projected to be 431 million in the second quarter.
Zacks Rank & Other Stocks to Consider
SNAP currently carries a Zacks Rank #2 (Buy).
Docebo (DCBO - Free Report) , Diebold Nixdorf, Incorporated (DBD - Free Report) and Amdocs (DOX - Free Report) are some other top-ranked stocks that investors can consider in the broader sector. While DCBO and DBD sport a Zacks Rank #1 (Strong Buy) each, DOX carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of DCBO have lost 9.1% year to date. The company is set to report first-quarter 2024 results on May 9.
Shares of DBD have climbed 11.6% year to date. It is slated to report first-quarter 2024 results on May 2.
Shares of DOX have lost 2.6% year to date. The company is set to report first-quarter 2024 results on May 8.