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 59% in extended trading.
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“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.”
In a conference call late Thursday, Snap Chief Financial Officer Derek Andersen said Snap oversaw macroeconomic conditions such as supply-chain and labor issues because its direct-response advertising recovered “quicker than we anticipated” from Apple’s privacy changes.
Snap was already feeling Meta Platform Inc.’s FB,
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. Snap topped $4 billion in 2021 sales. 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,
“Snapchat is clearly not as prone to the TikTok effect as Meta, with strong daily active user growth in all regions, including North America,” Insider Intelligence analyst Jasmine Enberg said in an email message. “Even so, most growth came from Rest of World, and most of that likely from India, where TikTok remains banned.”
Snap reported 319 million daily active users in the fourth quarter, edging an average analyst forecast of 317 million, according to FactSet.
