Snap Smashes Fourth-Quarter Revenue Estimates, Stock Jumps

07 February, 2018, 01:50 | Author: Shannon Aguilar
  • Michael Loccisano  Getty Images
Evan Spiegel

In 2017, the year it went public, Snap recorded a stock-based compensation expense of $2.6 billion, accounting for 77 percent of its net loss and more than three times the amount it generated in revenue. The business's quarterly revenue was up 62.2% compared to the same quarter last year. equities research analysts predict that Snap will post -3.03 EPS for the current fiscal year. Adjusted EBITDA was a loss of $158.9 million, compared to the adjusted EBITDA loss of $152.3 million in the year-ago quarter.

Shares in the social media company spiked Tuesday, rising 22 percent in after-hours trading. This is the first time Snap has beat market expectations since going public past year. The sales boost represented a 72 percent year-over-year increase. But the company's bet on Spectacles has been expensive, costing the company $40 million last quarter for "excess inventory".

To make its app more friendly with users and advertisers, Snap launched a redesigned app in November, splitting "friends" from content feeds.

"Our business really came together towards the end of past year and I am very proud of our team for working hard to deliver these results", said Snapchat CEO Evan Spiegel in prepared remarks to Tuesday's earnings call. The company added just 4.5 million new daily users last quarter, down from the eight million analysts were looking for.

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These financial and growth achievements come after months of a declining stock, news of top talent leaving the company, and concern of older users fleeing to Facebook's Instagram Stories.

Snap is now locked in a fight for its life with Facebook, which copied its marquee Stories feature - and the accompanying selfie filters and masks - and inserted them into all of its major products: Facebook, Instagram, WhatsApp and Messenger.

Those design changes have put a bigger emphasis on user-to-user sharing, as opposed to content created by publishers and brands.

If you want to know how a company like Snap can lose nearly $3.5 billion in a year, look no further than stock rewards to engineers. However, much like Twitter before it, Snap has struggled to turn engaged users into cold hard cash.

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