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Snap
The company’s financial results for the fourth quarter exceeded Wall Street expectations on Thursday. But executives said 2021 will be a tumultuous year after a January cut in advertising spending and technological changes that
Apple
plans to implement.
Snap stock (ticker: SNAP) fell 7.7% in the extended session. The shares fell 1.6% during normal trading, to close at $ 58.31.
Snap reported a net loss of $ 113.1 million in the fourth quarter, which equates to eight cents per share, compared to a loss of $ 240.7 million, or 17 cents per share, a year ago. Adjusted for stock compensation, among other things, earnings were nine cents per share. Wall Street expected an adjusted profit of seven cents per share.
The company reported that sales grew 62%, to $ 911.3 million, from $ 560.9 million a year ago. The consensus revenue estimate was $ 856.1 million.
“We delivered our first full year of adjusted Ebitda profitability and, looking ahead, we are excited to build our investments in augmented reality, mapping and content to drive our continued growth,” said CEO Evan Spiegel.
Ebitda – earnings before interest, taxes, depreciation and amortization – is a measure of non-GAAP profitability.
In prepared comments, executives attributed the gains to the company’s growth outside the United States and the improvements it has made to its advertising technology. Business director Jeremi Gorman said that direct response advertising has remained stable throughout the year.
Snap’s daily membership count has risen to 265 million, well above the consensus forecast of 257.9 million.
The next quarter, however, can be a bigger challenge. In prepared comments, Chief Financial Officer Derek Anderson said that Snap experienced “a period of disruption” in the first two weeks of January because of the violent attack on the United States Capitol. An undisclosed number of brands stopped advertising during that period.
Equal to
Facebook
Guidance from (FB), Anderson warned Snap investors about a future technological change in Apple’s mobile operating system (AAPL) that could harm ad targeting. Anderson said it was unclear what impact the changes in technology will have in the long run.
Apple said its adjustment will help protect customer privacy, an argument that Facebook said was not genuine.
Despite setbacks at the beginning of the year, Spiegel said that Snap expects to make further progress in profitability and increase revenue by more than 46%, which Snap increased sales last year.
The company expects first quarter sales of $ 720 million to $ 740 million. Analysts modeled an adjusted first quarter loss of two cents per share on sales of $ 705.1 million.
Write to Max A. Cherney at [email protected]