Snapchat reported a “challenging” quarter of earnings today, missing revenue and profit estimates.
The company is among the first Big Tech companies to report this season, acting as an augur-of-sorts for the many big names reporting early next week.
The company posted an EPS loss of ($0.02) vs. expected earnings of $0.01. Revenue came in at $1.06 billion, a touch below the analyst’s expectations of $1.07 billion. The company’s average revenue per user (ARPU) was $0.05 lower than analysts expected, at $3.20/user.
The EPS miss came from an unexpected loss related to a venture investment in cloud software company HashiCorp, which chose a pretty bad time to go public (December 2021, lol… iykyk.) The company indicated it had a $92 million unrealized loss and without it, the company’s net income would have improved to the score of high single-digits.
The company’s CEO Evan Spiegel cited macro conditions and advertisers pausing campaigns in light of Russia’s invasion of Ukraine. If Spiegel is correct, and campaigns are being halted on socials across the board, then it’s possible that ad-focused businesses could be in for a rough quarter of earnings.
Given continued uncertainty in the markets, Snap indicated that revenue for the forward quarter will only rise between 20-25%. Analysts were estimating 28%.
In spite of all these negative figures and data points, the company’s revenue actually grew 38% and daily users grew 18% YoY. That’s one reason why $SNAP went as much as 7% higher in trading.