Snap stock slips on weak Q1 guidance

Sara Fischer
·2 min read

Snapchat's stock was down in after-hours trading Thursday, despite beating Wall Street expectations on user growth, as well as top and bottom lines.

Why it matters: The camera company warned investors that its forecast for this quarter would be lower than expected, in part due to a drop in advertiser demand in the two weeks following the Capitol siege, as well as upcoming Apple privacy changes.

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Details: Like rival Facebook, Snapchat warned investors that Apple's upcoming iOS privacy changes "will present another risk of interruption to (advertiser) demand."

  • Snapchat, like Facebook, does have a number of app install advertisers.

  • Those two factors likely impacted the company's stock drop.

By the numbers, per CNBC:

  • Adjusted earnings per share: 9 cents vs. 7 cents per share forecast by Refinitiv

  • Revenue: $911 million vs. $857.4 million forecast by Refinitiv

  • Global daily active users (DAUs): 265 million vs. 257.79 million per FactSet

  • Average revenue per user (ARPU): $3.44 vs. $3.34 forecast by FactSet

Between the lines: Snapchat also said its new user generated video feature, Spotlight, saw 100 million monthly active users in January, suggesting that demand for the TikTok-style video trend can be replicated on other apps. Snapchat's user base is mostly under age 30.

  • In an effort to lure users to try the new feature, Snapchat said last quarter it will give away $1 million total to the creators of the top-performing videos on Spotlight each day for the remainder of 2020, and potentially beyond.

The big picture: Snapchat has been able to avoid most of the regulatory and industry pressure around privacy, in part due to the way it's been engineered and structured.

  • As Axios has previously noted, Snapchat had its best year in 2020, increasing its stock price from roughly $16 in January to more than $52 today.

Go deeper: Snapchat launches TikTok competitor Spotlight

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