<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Snap (SNAP) is set to post quarterly results after market close Tuesday in a report that will prove whether the social media company has sustained recent improvements in user growth and monetization.” data-reactid=”15″>Snap (SNAP) is set to post quarterly results after market close Tuesday in a report that will prove whether the social media company has sustained recent improvements in user growth and monetization.
Here are the main numbers the Street is expecting from the report, according to Bloomberg-compiled consensus data:
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Revenue: $437.9 million expected vs. $297.7 million YOY
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Adjusted loss per share: 3 cents expected vs. 12 cents YOY
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Daily active users: 206.1 million vs. 186 million YOY
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Snap, the parent company of the disappearing photo app Snapchat, has grown its user base in each quarter since the start of this year, reversing a declining trend from 2018. In its July report, the company’s 203 million total global daily active users topped expectations by more than 10 million.” data-reactid=”21″>Snap, the parent company of the disappearing photo app Snapchat, has grown its user base in each quarter since the start of this year, reversing a declining trend from 2018. In its July report, the company’s 203 million total global daily active users topped expectations by more than 10 million.
The Santa Monica, California-based company has attracted new users – and kept existing ones from leaving the platform – through a combination of user experience revamps and marketing pushes, Richard Greenfield, partner at LightShed Partners, wrote in a note initiating coverage of Snap on Monday.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For the reported quarter, Snap likely benefited from its recently rebuilt Android app, redesigned Discover section and “Real Friends” global ad campaign launched in July, which oriented the company as a friendlier platform versus competitors like Facebook-owned (FB) Instagram, Greenfield said. He rates Snap as a Buy.” data-reactid=”23″>For the reported quarter, Snap likely benefited from its recently rebuilt Android app, redesigned Discover section and “Real Friends” global ad campaign launched in July, which oriented the company as a friendlier platform versus competitors like Facebook-owned (FB) Instagram, Greenfield said. He rates Snap as a Buy.
And on the advertisers’ side, Snap Select – which lets customers embed their ads into more premium content on Snap Discover like ESPN and BuzzFeed shows – likely helped drive further monetization and increase time spent on the app, Greenfield added. Snap Select was first launched in the second quarter.
“Our conviction in Snapchat’s recovery has grown meaningfully over the course of 2019, as we hear positive first-hand feedback from advertising clients and programming partners,” Greenfield said.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Snap also introduced Instant Create in July, a tool simplifying the process for advertisers to build campaigns and potentially helping “improve spend from the longer-tail of clients,” according to JPMorgan analyst Doug Anmuth.” data-reactid=”37″>Snap also introduced Instant Create in July, a tool simplifying the process for advertisers to build campaigns and potentially helping “improve spend from the longer-tail of clients,” according to JPMorgan analyst Doug Anmuth.
But other factors that helped drive ballooning net user additions earlier this year may have faded, other analysts pointed out. Snap’s second-quarter results had been driven in large part by the virality of the app’s then-newly launched gender-swapping and baby-faced photo filter. Some pundits speculated the carry-over benefit from these features may be more muted for this reported quarter.
“We estimate 4MM DAU [daily active user] net adds in 3Q19, a deceleration from 2Q levels as the new A/R [augmented reality] lenses impact is likely lower in 2H19,” John Blackledge, an analyst with Cowen, wrote in a note. “However, [management] commentary on the 2Q19 call around stronger retention due to the latest Android update could provide upside on DAU net add numbers in 3Q19.”
Snap’s stock has pared some gains after breaching $17 per share in late September amid a broader rotation out of high-growth names. Its shares are still up 164% for the year to date through Monday’s close, versus a 20% gain in the S&P 500.
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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck” data-reactid=”55″>Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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