Why Snap Shares Are Booming
Snap reported its fourth-quarter better-than-expected financial results after the markets closed on Tuesday.
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Snap Inc. (NYSE: SNAP) reported fourth-quarter financial results after markets closed Tuesday. The company said that it had a net loss of $0.13 per share on $285.7 million in revenue, which compares with consensus estimates from Thomson Reuters that called for a net loss of $0.16 per share and $252.95 million in revenue. The same period of last year reportedly had a net loss of $0.19 per share on revenue of $165.68 million.
During the quarter, daily active users (DAU) increased 8.9 million or 5% sequentially to 187 million, representing the highest net adds since the third quarter 2016. DAUs increased 28.8 million or 18% year-over-year.
Average revenue per user was $1.53 in the quarter, up 46% year over year and 31% sequentially. Cost of revenue per user was $1.02, up 5% year over year and down 14% sequentially.
For the fourth quarter, adjusted EBITDA loss was $158.9 million, an increase of 4% year over year and an improvement of 11% sequentially. Full-year adjusted EBITDA loss was $720.1 million, and it was $459.2 million in 2016.
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On the books, Snap’s cash and marketable securities totaled $2.0 billion at the end of the quarter. Cash management reduced the fourth quarter cash burn to $255 million, down 49% sequentially.
The company did not issue any guidance, but the consensus estimates call for a net loss of $0.16 per share on $236.45 million in revenue for the first quarter.
Shares of Snap closed up 1.5% at $14.06, with a consensus analyst price target of $12.36 and a 52-week range of $11.28 to $29.44. Following the announcement, the stock was up 21% at $17.02 in Tuesday’s after-hours trading session.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
