Snap Stock Is Diving Wednesday: What's Going On?
Snap said fourth-quarter revenue increased 5% year-over-year to $1.361 billion, which missed the consensus estimate of $1.38 billion, according to Benzinga Pro. The company reported quarterly adjusted earnings of 8 cents per share, which beat analyst estimates of 6 cents per share.
Operating cash flow came in at $165 million and free cash flow totaled $111 million during the quarter.
Daily active users grew 10% year-over-year to 414 million. Average revenue per user came in at $3.29. Total time spent watching Spotlight increased more than 175% year-over-year.
Snap didn’t provide formal guidance last quarter, citing headwinds related to the ongoing conflict in the Middle East. In a letter to shareholders this week, Spiegel noted that the Middle East conflict is estimated to have a two percentage point impact on year-over-year growth in the fourth quarter.
Operating cash flow came in at $165 million and free cash flow totaled $111 million during the quarter.
Daily active users grew 10% year-over-year to 414 million. Average revenue per user came in at $3.29. Total time spent watching Spotlight increased more than 175% year-over-year.
Snap didn’t provide formal guidance last quarter, citing headwinds related to the ongoing conflict in the Middle East. In a letter to shareholders this week, Spiegel noted that the Middle East conflict is estimated to have a two percentage point impact on year-over-year growth in the fourth quarter.
Transcript
00:00 Snapchat reported earnings after the close yesterday and the market's opinion on it. Pretty clear. They didn't like it
00:06 It is the stock is down 30 percent pre-market. This is after the stock traded higher into the earnings
00:13 Let's go through some of the numbers. So the EPS beat by two cents revenue came in at 1.36 billion missed by 20 million
00:21 Some decent user growth. But again that revenue miss was the big number that the market was looking at
00:28 Snapchat is kind of in that boat that meta was it?
00:31 I mean, I'm about Facebook way back in the day where it had all those users but couldn't monetize its user base
00:36 well, so the market is
00:38 Punishing the stock this morning. You're seeing some other social media stocks like Pinterest trade lower as well
00:44 And obviously met us at the bar very high for writing companies because meta just absolutely blew it away
00:51 You're like, oh, maybe all these social media companies are just killing it, you know kicking ass and taking names
00:57 Obviously not the case snap, you know was there 10% year-over-year increased eau's. That's good
01:03 You know, the revenues kind of there but you know, it's eight cents versus six cents
01:08 I mean that's slight miss on revenue actually, right one point three six versus one point three eight. I mean meta just destroyed
01:13 Yeah, and some cautious I should I should mention some cautious guidance from snap as well
01:18 It's another company like we saw from McDonald's that citing headwinds from the war in the Middle East
01:23 Which I mean, you know, it's it's one
01:25 I guess it's just when you have all these companies reporting and beating and everyone's dealing with the same, you know
01:31 Geopolitical climate then I'm not, you know
01:34 I don't know how much more snap is impacted by this war in the Middle East and meta is
01:38 But one stock had a great quarter and one stock didn't and one stock gave good guidance another stock didn't so
01:44 You know again, I mean like you said then it's just the expectations were high for snapchat
01:48 We talked the other day about how they asked the order on this where snapchat used to report a couple days before
01:55 Meta and would actually move meta move
01:58 Pinterest and Google because it's the ad revenue sales is the number that the market is looking at and
02:04 You know
02:05 The expectation is that okay if one company had strong ad sales then that must mean all the social media companies had strong ad sales
02:11 As we've seen that's not the case. All right, so
02:15 Technically, I mean you see it's down five over five dollars. That's 30%
02:20 I mean just look at a way this traded way the way it traded immediately
02:24 There's a very patient buyer here at 12 bucks and on there whether they're gonna be there in a regular session
02:30 Whether they're gonna get Stan Nathan
02:33 That's a joke
02:37 He's he's the snapchat guy he buys and he's the most contrarian like if you watch CNBC's fast money
02:43 He's you always know Kramer always goes with the flow Dan Nathan always goes exactly against it the stocks down 30%
02:49 He likes it stocks up 30% He thinks it's nuts. So I mean he's always you know, the opposite of momentum
02:55 But anyways, he said last night actually did think wait a couple days and he says then buy snapchat
03:00 Yep, tight market. I'll just be aware that you know, if they're scooping it up under 12
03:07 They might be selling it at 1231 because that's been that's been the high in the last two 15 minute brackets
03:14 So down down over five bucks. I think you have a patient buyer here
03:19 Intraday chart here and not just like I'm looking I'm just looking away you want to find a five minute
03:26 Yeah, like we're still we're pretty much that's what we want to see because that's showing the real trading action
03:30 So I think you know for the most part these are the shirts we're gonna lean on here Aaron is obviously
03:35 It's nice to look at the 90-day get a feel for where the stock was
03:37 But then you know, we're talking about the pre-market action. So let's show that pre-market action. It is ugly
03:42 Yeah, and I mean so one thing with snapchat it it does have a younger user base than you know
03:48 Most social media companies and a lot of companies like having a young user base because they're like, okay
03:52 Well, if we have a 18 year old customer
03:54 They're gonna spend money with us for 60 years versus a 50 year old that might not be around for that long
03:59 But for snapchat, I worry that they're younger that they're that their user base is too young
04:04 Yeah, I have money. Yeah, exactly
04:06 Advertisers are showing it. I saw an ad
04:08 Dennis the other day on snapchat for vision Pro now mind you like the only people I have on snapchat are aged
04:14 26 and younger. I don't know a single person that's got you know, thirty five hundred extra dollars hanging around to buy a vision Pro
04:21 So I think there's probably a lot of companies that buy the ads on snapchat and then realize oh
04:25 We're not getting a lot of conversion here. So they go with other company and even YouTube and like my kids
04:32 So I never knew you know, I don't know how to work the TV as much but you know
04:37 they watch YouTube and
04:38 they're like
04:39 why do you watch the commercials just go look like this and they like press three buttons that go back over and like there's like a
04:45 Control like yeah often. They give you the little skip button the corner, but they know a way to skip the skip
04:51 So when they don't
04:53 They they literally get off the commercial in one second
04:56 It's like if you have a mandatory commercial 30 seconds
04:58 My kids have figured out a way and they're six and nine to get around that commercial
05:03 The kids are smart and kids are not tolerable to commercials because me and Joel grew up
05:09 TV, you know, you got your five-minute commercial then you get back to your 15 minutes of your show
05:13 Then you got your five-minute commercial kids nowadays are not tolerable to commercials whatsoever. They
05:19 Absolutely hate them. So I don't even think I think it is a way so I think conversions an issue
05:24 I think advertising the younger generation is an issue here. But you know, those are bigger picture stuff
05:29 So the bottom line is snapchat though is getting ticked off to death
05:33 Yeah talked about you know, it's tick tock tick tock and meta has found, you know different avenues different paths
05:39 You know, they use obviously I got Instagram. They got a lot of other things going on there, but
05:43 Snap is getting ticked off. It's gonna be interest Pinterest reports people asking about it on Thursday
05:49 So what does this do now? You had meta kill it snap, you know laid an egg here
05:54 So puts Pinterest kind of in the middle Pinterest is pulling back here this morning on the snapchat is down 3% here
06:00 But does this mean that snap just set the bar a little bit lower for Pinterest?
06:04 Maybe I mean if I'm Pinterest, I'm pretty happy that didn't report right after meta
06:08 I'm pretty happy that I report after a disappointing snap quarter