Snap plunges on first-quarter revenue miss
Snap continues to suffer in a tough digital ad market with its first-quarter sales missing analyst projections.
AbJimroe
Snap shares dropped as much as 20% after hours on Thursday as the company reported first-quarter results that missed analysts' expectations on revenue.
Here's how the company did:
Earnings per share: 1 cent, adjusted, vs. a loss of 1 cent expected, according to a Refinitiv survey of analystsRevenue: $989 million vs. $1.01 billion expected, according to RefinitivGlobal Daily Active Users (DAUs): 383 million versus 384 million expected, according to StreetAccountAverage revenue per user: $2.58 vs. $2.63 expected, according to StreetAccountAlthough the company didn't provide official guidance for the second quarter, it said in a letter to shareholders that its "internal forecast" for revenue would be $1.04 billion, representing a 6% year-over-year decline. Analysts were estimating that second-quarter sales projections would be $1.10 billion.
Snap's first-quarter revenue declined 7% from $1.06 billion during the year-earlier period, while the net loss narrowed from $359.6 million, or 21 cents per share, in the first quarter of 2022 to $328.7 million, or 22 cents per share.
The company's free cash flow was $103 million in the first quarter, representing a nearly 3% year-over-year decrease.
"We are working to accelerate our revenue growth and we are using this opportunity to make significant improvements to our advertising platform to help drive increased return on investment for our advertising partners," Snap CEO Evan Spiegel said in a statement.
Like much larger rivals, including Facebook and Google, Snap continues to operate in a difficult online ad market in which companies have reduced their marketing and promotional spend as the economy remains shaky.
But unlike those giant rivals, Snap doesn't have the enormous presence around the world to help manage the difficult digital ad sector more smoothly.
For instance, Meta suffered three straight quarters of shrinking sales, but reported a 3% year-over-year growth of $28.65 billion during the first quarter, thanks in part to Chinese companies spending a lot of money on Facebook to show ads to people around the world.
