Instant gains (SNAP) in the fourth quarter of 2020

Snap’s shares fell more than 7% after trading hours on Thursday after the company released its fourth-quarter earnings, despite exceeding Wall Street’s expectations of earnings, revenues and user growth. But the company provided an adjusted EBITDA forecast for the first quarter that was much lower than analysts’ consensus expectations.

Here’s what they reported:

• Adjusted earnings per share: 9 cents against 7 cents per share provided by Refinitiv
• Recipe: $ 911 million vs. $ 857.4 million provided by Refinitiv
• Global daily active users (DAUs): 265 million versus 257.79 million by FactSet
• Average revenue per user (ARPU): $ 3.44 vs. $ 3.34 provided by FactSet

Snap advised that it would lose between $ 50 million and $ 70 million on an adjusted EBITDA basis in the first quarter, well away from analysts’ consensus expectations of an adjusted EBITDA profit of $ 19.3 million, according to Refinitiv.

The company’s net loss fell to $ 113 million, down more than 53% from last year’s net loss of $ 241 million.

Snap reported 265 million daily active users, an increase of more than 6% over the 249 million that the company reported in October. That number increased by almost 22% compared to the 218 million daily users that the company reported a year earlier.

Snap expects 56% to 60% year-over-year revenue growth for the first quarter, Snap’s chief financial officer, Derek Andersen, said in prepared comments. The company also expects to reach approximately 275 million DAUs in the first quarter, Andersen said.

The company’s performance in the first quarter, however, can be impacted by two main factors. First, Andersen pointed out that Snap experienced two weeks of interruption in advertising demand when brand advertisers paused campaigns in the period after the January 6 uprising on the United States Capitol.

“So we started the quarter more slowly than we would have expected otherwise,” Andersen said in his prepared comments.

In addition, Andersen warned that Apple’s privacy changes in iOS 14, which are expected to take effect at the end of the first quarter, “present another risk of demand disruption”. These changes may affect the ability of social media companies to target ads to users.

“It is not yet clear what the long-term impact of these changes may be to the frontline momentum of our business, and this may not be clear until several months or more after the changes are implemented,” said Andersen in his prepared comments. .

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