SNAP's Q1 Earnings Match Expectations, Revenues Increase Y/Y

Core Insights - Snap (SNAP) reported first-quarter 2025 earnings of 4 cents per share, matching the Zacks Consensus Estimate, and reflecting a 33.33% increase from the previous year [1] - Revenues rose 14.1% year over year to $1.36 billion, surpassing the Zacks Consensus Estimate by 1.15% [1] Revenue Breakdown - North America contributed 61% of total revenues, with an 11.9% year-over-year increase to $831.7 million [2] - European revenues, accounting for 16.4% of total revenues, increased by 14.4% to $224.02 million [2] - Revenues from the Rest of the World (ROW) reached $307.5 million, up 20.2% year over year [2] User Engagement - Snap's global daily active users (DAU) reached 460 million, marking a 9% year-over-year increase [4] - North America's DAU was 99 million, down 1% year over year, while Europe's DAU also stood at 99 million, up 3.1% [5] - ROW's DAU increased significantly by 15.9% to 262 million [5] - The total monthly active users surpassed 900 million in the first quarter [5] Advertising Performance - The number of advertisers with strong signal setups increased by 29% for large advertisers and 48% for mid-sized advertisers [6] - Over 60% of all direct response (DR) ad revenues have completed Conversions API (CAPI) integrations [6] Operating Expenses - Adjusted cost of revenues rose 11.7% year over year to $636.6 million [7] - Adjusted operating expenses were $618.2 million, up 6.7% year over year, with sales and marketing expenses decreasing by 1.3% to $195.8 million [7] - General and administrative expenses increased by 8.2% to $190 million, while research and development expenses rose 13.2% to $232.4 million [7] Financial Metrics - Adjusted EBITDA was $108.4 million, reflecting a 137.5% increase from the previous year [8] - As of March 31, 2025, cash and cash equivalents and marketable securities totaled $3.2 billion, down from $3.37 billion at the end of 2024 [9] - Operating cash flow was $152 million compared to $88 million in the prior year, and free cash flow was $114 million, up from $38 million [9] Guidance - For the second quarter of 2025, Snap expects infrastructure costs per DAU to be between 82 cents and 87 cents [11] - Adjusted operating expenses are projected to be between $2.65 billion and $2.7 billion [11]