Snap (SNAP) reported third-quarter 2024 earnings of 8 cents per share, which beat the Zacks Consensus Estimate by 60% and surged 300% from the year-ago quarter. The stock jumped more than 10% in extended trading. Revenues increased 15.5% year over year to $1.37 billion and beat the Zacks Consensus Estimate by 1.36%. Geographically, revenues from North America (62.5% of revenues) increased 9.1% year over year to $857.6 million. Revenues from Europe (18.1% of revenues) increased 24.3% to $248.9 million. Reven ...

I recently joined The REIT Forum and if you are looking for more investment ideas like this one, get them exclusively at The REIT Forum with access to our subscriber only portfolios. I last wrote about Snap (NYSE: SNAP ) in September, where I reiterated my "buy" rating despite severely reducing my price target of the stock, as I believed there to be an attractive tradeable bottom in the stock from Amrita runs a boutique family office fund in beautiful Vancouver, where she leads the investment strategy for t ...

Evan Spiegel, CEO of Snap Inc., speaks during the 6th annual Snap "Partner Summit" on September 17, ... [+] 2024, at the Barker Hangar in Santa Monica, California. (Photo by Frederic J. BROWN / AFP) (Photo by FREDERIC J. BROWN/AFP via Getty Images) AFP via Getty Images Snap's stock (NYSE: SNAP) surged over 10% in after market hours on Tuesday, October 29, after the company posted upbeat Q3 results. Snap reported revenue of $1.37 billion and adjusted earnings of eight cents per share - faring better than the ...

Core Insights - Snap's stock increased by 10% following a third-quarter revenue report that exceeded Wall Street expectations, with revenue growing 15% year-on-year to $1.37 billion, surpassing analyst estimates of $1.36 billion [1][3][4] Revenue Growth - The revenue growth was primarily driven by the introduction of AI features and an increase in Snapchat+ subscribers, which reached 12 million, contributing approximately $123 million to quarterly revenue [6][7] - Snap's CEO highlighted that AI-generated features and machine learning for personalization are beginning to show positive results in user engagement [3][4] User Engagement - Daily active users increased by 11 million in the third quarter, representing a 9% year-on-year growth, although the company projects a more modest increase of 8 million users in the current quarter [4][5] - The number of creators posting content on the platform grew by approximately 50% year-on-year in Q3, attributed to new AI tools for creators [4] Advertising Strategy - Snap has revamped its advertising approach, shifting from brand awareness ads to more expensive direct response ads that encourage user action [7] - Despite positive developments, Snap reported a loss of $368 million in Q3, continuing a trend of financial losses [7][9] Competitive Landscape - Snap's user base of 443 million is significantly smaller compared to competitors like Meta and TikTok, which have 3.3 billion and over 1 billion users respectively, leading to challenges in capturing ad revenue [8] - Analysts noted that the performance gap between Snap and larger competitors is widening, contributing to market share losses [8][9]

For the quarter ended September 2024, Snap (SNAP) reported revenue of $1.37 billion, up 15.5% over the same period last year. EPS came in at $0.08, compared to $0.02 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $1.35 billion, representing a surprise of +1.36%. The company delivered an EPS surprise of +60.00%, with the consensus EPS estimate being $0.05. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how the ...

Financial Data and Key Metrics - Total revenue in Q3 2024 was $1.37 billion, up 15% year-over-year and 11% quarter-over-quarter [30] - Advertising revenue was $1.25 billion, up 10% year-over-year, driven by a 16% increase in DR advertising revenue [30] - Other revenue, primarily from Snapchat+ subscriptions, more than doubled year-over-year to $123 million, with Snapchat+ subscribers exceeding 12 million [30] - Adjusted EBITDA was $132 million, up from $40 million in Q3 2023, reflecting higher revenue and disciplined operating expenses [36] - Free cash flow was $72 million, with operating cash flow at $116 million [38] - Net loss improved by 58% year-over-year to $153 million, driven by higher adjusted EBITDA and reduced stock-based compensation [37] Business Line Performance - Daily Active Users (DAUs) reached 443 million in Q3, up 37 million year-over-year and 11 million quarter-over-quarter [7][15] - North America DAUs were 100 million, flat year-over-year but up quarter-over-quarter [15] - Europe DAUs were 99 million, up from 97 million in the prior quarter and 95 million in the prior year [15] - Rest of World DAUs were 244 million, up from 235 million in the prior quarter and 211 million in the prior year [15] - Snapchat+ subscription business more than doubled year-over-year, contributing to other revenue growth [30] Market Performance - North America revenue grew 9% year-over-year, Europe revenue grew 24%, and Rest of World revenue grew 32% [31] - Global impression volume grew 19% year-over-year, driven by expanded advertising delivery within Spotlight and Creator Stories [32] - eCPMs were down 7% year-over-year due to inventory growth exceeding advertising demand [32] Strategic Direction and Industry Competition - The company is focused on growing its community, deepening engagement, and diversifying revenue sources, particularly through augmented reality (AR) and AI innovations [7][10] - Snap introduced the fifth generation of Spectacles, AR glasses powered by Snap OS, and generative AI innovations for its AR developer platform [10] - The company is investing in machine learning and evolving its advertising products to better serve advertising partners, particularly in the lower-funnel DR business [8] - New ad placements, Sponsored Snaps and Promoted Places, are expected to contribute incremental advertising inventory over time [28] Management Commentary on Operating Environment and Future Outlook - Management highlighted the potential for Simple Snapchat to drive content engagement among less frequently engaged users, which could be an important input to impression growth and incremental reach for advertisers [40] - The company is cautiously testing Simple Snapchat in highly monetized markets, with a broader rollout not expected until Q1 2025 at the earliest [41] - Q4 2024 revenue guidance is $1.51 billion to $1.56 billion, implying year-over-year growth of 11% to 15% [43] - The company authorized a new $500 million share repurchase program, reflecting confidence in its financial position and commitment to long-term shareholder value [47] Other Key Information - Adjusted cost of revenue was $637 million, up 16% year-over-year, driven by infrastructure costs related to ML and AI investments [33] - Adjusted gross margin was stable at 54%, in line with the prior year [34] - Adjusted operating expenses were $604 million, up 1% year-over-year, with lower personnel costs offset by higher marketing and legal-related costs [35] Q&A Session Summary Question: Risk Management for Simple Snapchat Transition - The company is taking a test-and-learn approach to Simple Snapchat, focusing on understanding shifts in inventory and potential impacts to monetization before a broader rollout [50] Question: Rollout Timing for Simple Snapchat in Major Markets - The company is still early in understanding the monetization dynamics of Simple Snapchat and is considering a phased rollout over an extended period to minimize disruption [53] Question: Potential of Sponsored Snaps and Promoted Places - Sponsored Snaps and Promoted Places are expected to leverage Snap's existing ad format, providing incremental advertising inventory over time [56][57] Question: Balance Between Engagement and Monetization in Simple Snapchat - The company's primary focus is on creating the best product experience for its community, which is expected to drive long-term advertising opportunities [61][63] Question: Spotlight Engagement Outside North America - Spotlight engagement has shown strong growth globally, with North America seeing a mix shift from Stories to Spotlight content [64] Question: App Install Product Performance and Q4 Revenue Growth - The company has seen strong results from app install and app purchase optimizations, with cost-per-install down 24% and cost-per-purchase down 27% [68] - Q4 revenue growth is expected to be driven by continued execution in the DR business, with limited recovery expected in Brand advertising [71][72] Question: Confidence in Outpacing Digital Ad Market Growth - The company is focused on executing its DR business roadmap, particularly in the lower-funnel segment, and growing its SMB customer base to drive sustained revenue growth [76][80] Question: Investment and Timing for Spectacles - The company is focused on building a robust developer ecosystem for Spectacles to ensure a strong library of AR experiences before widespread consumer adoption [83][84]

Core Insights - Snap introduced a simplified version of Snapchat, focusing on three main experiences: communication, camera use, and content viewing, aiming to enhance user engagement and creator discovery [1] - The company is optimistic about the long-term potential of Simple Snapchat, emphasizing the need for careful testing and understanding of monetization dynamics before a broader rollout [2] - Snap's content platform is experiencing significant growth, with a 60% year-over-year increase in sharing Spotlight content and a 50% growth in content posting [3] Financial Performance - Snap reported a 15% increase in revenue, reaching $1.37 billion, while net loss improved to $153 million from $368 million in the same quarter last year [6] - Daily active users rose by 9% to 443 million, and Spotlight achieved over 500 million monthly active users, marking a 21% year-over-year increase [7] Innovations and Features - The company launched new AI features to enhance content creation and community engagement, including AI-generated collages in Snapchat Memories [2] - Augmented reality remains a key focus, with over 375,000 AR creators producing 4 million Lenses, and new generative AI tools introduced to simplify AR creation [4] - Snap announced new ad placements, Sponsored Snaps and Promoted Places, to increase advertising reach [6]

Financial Performance - Net loss for the three months ended September 30, 2023, was $153.247 million, compared to a net loss of $368.256 million for the nine months ended September 30, 2023[21]. - Revenue for Q3 2024 was $1,372,574, a 15.5% increase from $1,188,551 in Q3 2023[23]. - Net loss for Q3 2024 was $153,247, compared to a net loss of $368,256 in Q3 2023, representing a 58.5% improvement[25]. - Operating loss decreased to $173,210 in Q3 2024 from $380,063 in Q3 2023, showing a 54.4% reduction[23]. - Total costs and expenses for Q3 2024 were $1,545,784, down from $1,568,614 in Q3 2023, a decrease of 1.5%[23]. - Basic net loss per share for Q3 2024 was $(0.09), an improvement from $(0.23) in Q3 2023[23]. - Adjusted EBITDA for Q3 2024 was $132.0 million, compared to $40.1 million in the same period last year[129]. - Free Cash Flow improved to $71.8 million, compared to a negative $60.7 million in Q3 2023[130]. - The increase in revenue was primarily driven by growth in advertisers and higher subscription revenue due to an increase in the number of subscribers[162]. - The company anticipates continued growth in revenue driven by optimization efficiencies and improvements in auction-based advertising demand[162]. Cash Flow and Liquidity - Cash flows from operating activities provided $115.872 million for the three months ended September 30, 2023, compared to $12.781 million for the nine months ended September 30, 2023[21]. - Cash, cash equivalents, and restricted cash at the end of the period were $968.393 million, down from $1.065 billion at the beginning of the period[21]. - Cash and cash equivalents decreased to $964,967 as of September 30, 2024, from $1,780,400 at the end of 2023[26]. - As of September 30, 2024, the company held $3.2 billion in cash, cash equivalents, and marketable securities[130]. - The company believes its existing cash balance is sufficient to fund ongoing working capital and investment requirements for at least the next 12 months[189]. User Metrics - Average Daily Active Users (DAUs) are calculated by adding the number of DAUs for each day of the quarter and dividing by the number of days in that quarter[14]. - Daily Active Users (DAUs) reached 443 million, reflecting a 9% year-over-year growth[128]. - Average Revenue Per User (ARPU) increased to $3.10, up from $2.93 in the prior year[128]. Expenses and Costs - Depreciation and amortization for the three months ended September 30, 2023, was $38.850 million, with stock-based compensation totaling $260.229 million[21]. - Research and development expenses for Q3 2024 were $412,791, down from $494,559 in Q3 2023, a decrease of 16.5%[23]. - Sales and marketing expenses for the three months ended September 30, 2024, were $273,107 thousand, an 8% decrease from $297,251 thousand in the same period of 2023[165]. - General and administrative expenses for the three months ended September 30, 2024, were $220,979 thousand, nearly unchanged from $221,051 thousand in the same period of 2023[166]. Investments and Acquisitions - The total purchase consideration for business acquisitions in 2023 was $73.1 million, including $56.3 million in cash and $12.6 million in other liabilities, with $42.8 million allocated to goodwill[58]. - As of September 30, 2024, the carrying amount of goodwill increased to $1,693.946 million, reflecting a foreign currency translation adjustment of $2.119 million[59]. - The total intangible assets as of September 30, 2024 amounted to $361.451 million, with a net value of $98.920 million after accumulated amortization of $262.531 million[61]. Debt and Financing - In May 2024, the company issued $750.0 million in convertible senior notes due in 2030, with net proceeds of $671.5 million after costs[63]. - The company repurchased $100.0 million of the 2025 Notes and $351.2 million of the 2026 Notes for a total cash price of $440.7 million, resulting in an $8.8 million gain on extinguishment[85]. - As of September 30, 2024, the total principal amount of Convertible Notes was $3.69 billion, with a net carrying amount of $3.64 billion after unamortized debt issuance costs[87]. - Total interest expense for the three months ended September 30, 2024, was $4.49 million, compared to $3.94 million for the same period in 2023, reflecting an increase of approximately 14%[89]. Restructuring and Workforce - The company completed a restructuring plan in Q2 2024, resulting in a global headcount reduction of approximately 10%[121]. - Total restructuring charges for the nine months ended September 30, 2024, amounted to $70,157,000[123]. - The company initiated a wind down of its AR Enterprise business, resulting in a 3% reduction in global employee headcount and $18.6 million in pre-tax restructuring charges[124]. Tax and Compliance - Income tax expense for the three months ended September 30, 2024, was $8.3 million, compared to $5.8 million for the same period in 2023[118]. - The effective tax rate for the three months ended September 30, 2024, was (5.7)%, compared to (1.6)% for the same period in 2023[173]. Strategic Investments - The carrying value of strategic investments as of September 30, 2024, was $188.6 million, down from $195.3 million as of December 31, 2023[108]. - Strategic investments recognized a net loss of $312,000 for the three months ended September 30, 2024, compared to a loss of $270,000 for the same period in 2023[110]. - Unrealized losses on strategic investments still held amounted to $372,000 for the three months ended September 30, 2024, compared to $400,000 for the same period in 2023[110].

Q3 2024 Earnings Slides October 29, 2024 Forward-Looking Statements & Non-GAAP Financial Measures This presentation contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this presentation, including statements regarding guidance, our future results of operations or financial condition, future stock repurchase programs or stock dividends, business strategy and plans, user growth and ...

Snap (SNAP) came out with quarterly earnings of $0.08 per share, beating the Zacks Consensus Estimate of $0.05 per share. This compares to earnings of $0.02 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 60%. A quarter ago, it was expected that this company behind Snapchat would post earnings of $0.02 per share when it actually produced earnings of $0.02, delivering no surprise.Over the last four quarters, the company has sur ...