Whipsawed by Meta’s poor results a day earlier, Snap Inc. reported its first quarterly profit as well as top- and bottom-line numbers that beat Street expectations on Thursday. The results turned around a recent stock slide, with shares surging 40% in extended trading.
Snap
SNAP,
the maker of photo messaging app Snapchat, said privacy changes imposed last year by Apple Inc.
AAPL,
on iOS devices hurt Snap’s ability to target and measure its digital advertising — echoing Meta’s concerns. Nonetheless, it persevered through strong sales that may be eating away at Meta’s audience.
“2021 was an exciting year for Snap and we made significant progress growing our business and serving our global community,” Snap Chief Executive Evan Spiegel said in a statement. “The strength of our core business has enabled us to accelerate our investments in augmented reality, transforming the way that the Snapchat community experiences the world through our camera.”
Snap was already feeling Meta Platform Inc.’s
FB,
pain after the company formerly known as Facebook reported a meta-bust of a quarter on Wednesday. Snap’s stock cratered 23% in Thursday trading to close at $24.51, a 52-week low, before rebounding in after-hours trading.
Snap posted a net income of $22.6 million, or a penny a share, compared with a loss of $113.1 million, or 8 cents a share a year ago and besting street predictions of a loss of 9 cents a share, according to analysts polled by FactSet. Snap’s adjusted earnings were 22 cents a share.
Snap’s sales improved 42% to $1.3 billion, which topped Street estimates of $1.2 billion. Company executives had earlier offered guidance of $1.165 billion to $1.205 billion.
Snap said it expects the Apple privacy changes and global supply-chain disruptions to linger a few more quarters. Executives issued first-quarter revenue guidance of $1.03 billion to $1.08 billion, in line with the $1 billion projected on average by analysts polled on FactSet.
Thursday’s precipitous drop in stock erased recent gains; Snap shares have nose-dived 48% so far this year, while the broader S&P 500 index
SPX,
has dropped 6% in 2022. Shares of Meta, by comparison, are down 29% this year, while Pinterest Inc.
PINS,
is off 32% and Twitter Inc.
TWTR,
is down 20%.
Snap reported 319 million daily active users in the fourth quarter, edging an average analyst forecast of 317 million, according to FactSet.
