Snap Q4 Revenue Surpasses Estimates, Shares Climb

Key Highlights

Snap Inc. reported fourth-quarter revenue of $1.72 billion, surpassing Wall Street's average estimate of $1.70 billion. Following the announcement, the company's shares climbed nearly 6% in extended trading, even as it issued a cautious revenue forecast for the upcoming quarter.

Performance Overview

The company's performance was bolstered by a 28% year-over-year increase in total active advertisers during the holiday season. Daily active users on Snapchat grew by 5% from a year earlier to 474 million. Additionally, the Snapchat+ subscription service demonstrated strong momentum, with its subscriber base increasing 71% to 24 million.

Financial Outlook and Impact

For the first quarter, Snap projects revenue to be between $1.50 billion and $1.53 billion, which is slightly below the consensus estimate of $1.55 billion. However, its outlook for adjusted EBITDA was strong, projected between $170 million and $190 million, beating estimates and signaling a strategic focus on profitable growth through tighter cost control.

Summary

Snap's Q4 results highlight successful advertiser acquisition and subscription growth. The market responded positively to the revenue beat and profitability focus, though the softer Q1 forecast indicates ongoing challenges from intense competition. Future performance will depend on sustaining this momentum.

FAQ

Q: What was Snap's reported revenue for Q4?

A: Snap reported Q4 revenue of $1.72 billion, which was a 10% increase compared to the same period in the previous year.

Q: Why did Snap's stock price rise despite a weak forecast?

A: The stock increased because the company's Q4 revenue beat expectations and its adjusted profit forecast for Q1 was stronger than anticipated, reassuring investors about its cost management and profitability.

Source: Investing.com