Some quick highlights as to why the stock is being punished.<p>> Adjusted Ebitda Loss $188.2M, Est. Loss $176.9M<p>> 1Q Daily Active Users 166M, Est. 168M<p>> 1Q Rev. $149.6M, Est. $158.6M<p>> 1Q Loss/Shr $2.31<p>I'm guessing the big issue is the miss on Daily active users. This is the same thing that caused the street ot hammer twitter.<p>Rule of thumb for non profitable tech companies....<p>If you are a company that isn't making a profit and you continually preach look at the users, look at the users. and then fail to even hit your target on that, you're going to get punished.....heavily.<p>Or put another way, you can either make a profit or make your non GAAP numbers, but you have to atleast hit one of the two.<p>One other issue from the Bloomberg momentary....<p>> A very key number here is revenue per user. Snap's results today are indicating average revenue per user at 90 cents. This is down from $1.05 (14%) from what it reported for Q4 2016, before its IPO.<p>To be completely fair, SNAP management wanted full control to build for the long term and Facebook was down 12% after their first earnings report and Twitter was down 24% so it might just be that its painful for rookie CEOs to manage a public company.<p>Too bad for employees that this comes before the lock up period ends.<p><i></i>EDIT<i></i><p>Just on the earnings call, they said they don't break out Spectical's numbers but the revenue it generated was about $8 Million.
I almost wonder if there's going to be a "liked it before it was cool" paradox to a lot of these social sharing startups dreams of continued user growth and eventual profitability. Facebook seems to have reached escape velocity as a quasi public utility, a ubiquitous enough communication medium that almost everyone is peer pressured into using it even though they increasing dislike it.<p>But the other social sharing platforms then become escape hatches for the cool kids to hang out and share stuff in more authentic/novel/exclusive communities, fueling a few to rocket growth and unicorn valuations. But like that indie band you discovered that's now playing on the radio every damn day, the bigger it gets the more the early adopters will move on to something else. And especially in a situation where your primary market is teenagers, there's nothing less cool than what was cool 5 years ago.
This is one of the ugliest financial statements I've ever seen. The multi-billion dollar loss is due mostly to stock compensation, but still their COGS or cost of revenues sold was greater than their revenues. That's probably the first time that's been seen for a sizable software company in the history of the industry.<p>They said their revenue per DAU is $.90 and their server costs per DAU were $.60...so that means server costs were around $100mn while total COGS were $160 mn. So what was that other $60 mn spent on? Admins? But I thought they used the Google App Engine infrastructure to avoid any server admins and such.<p>Their revenues are exploding with their revenue up nearly 400% from last year, but were below estimates as was user growth which are probably causing the current stock price drop.
User growth is plummeting:<p>Q4'15 - 13.8%<p>Q1'16 - 14%<p>Q2'16 - 17.2%<p>Q3'16 - 7%<p>Q4'16 - 3.2%<p>Instagram Stories launched Q3'16. Going forward, growth is going to be flat, maybe even negative, now that every messenger service now has their own Stories clone.
Is there any public company that releases earnings in realtime rather than quarterly and/or annually? Has this ever been tried? Is there any rational behind earnings being reported quarterly/annually besides it being aligned with existing regulatory and accounting procedures?
It still seems overvalued. What would you rather own?<p>Snapchat -- which, after dropping 23% today has a market cap of 21.5B.<p>Or ALL of...<p>Yelp - 2.21B<p>GoPro - 1.21B<p>FitBit - 1.38B<p>Groupon - 2.01B<p>Twitter - 13.59B<p>Sonic - 1.27B<p>...for a total of 21.67B
<i>[Net Loss] primarily due to the recognition of expense related to RSUs with a performance condition satisfied on the effectiveness of the registration statement for our initial public offering.</i><p>This reads like they gave out $2 BILLION in RSU's that vested if the company went public. <i>That</i> is a pretty sweet payday.<p>EDIT: It is a sweet payday unless you can't sell the stock to pay the taxes owed right away. Then if SNAP tanks you have a HUGE tax bill and no way to pay it.
But! SNAP is doing AR, Spectacles are a stroke of marketing genius, distributed to cool influencers, instead of boring geeks like Google Glass or HoloLens. \s<p>Guess you can't fool all people all the time.
So, let me get this straight: they expect to able to be a viable advertising outlet for brands, despite having no demographic targeting besides a rough guess at geolocation?<p>Hey, cool.<p>Good thing you're paying Google and Amazon about $200 million a year while your user growth plateaus!
Tech companies, and startups in particular, are touted as the powerhouses of American innovation and economy.<p>And yet, it seems that the past 5 years of economic activity have been illusory. I expect a similar fate of Uber and Airbnb. Once the dust settles only the staid big co's shall remain.
Lets not forget that Facebook lost a lot lot of money before finally discovering a way to monetize its services. This is SNAP's first public earnings report.<p>Disclosure: Not a user or stock holder of SNAP
"Hosting costs per DAU were $0.60 in Q1 2017"<p>This figure represents pure lunacy in the infrastructure department. Nobody leading this team cares about cost.
They lost $2.2billion on revenue of $150 million. Ouch (and yes those RSUs very much count). Even on an EBITDA basis they lost more than they had in revenue.<p>They've got to turn the ship around. With user growth rather anemic they're not going to easily "grow" their way to profitability. They need to sort the fundamentals of the company to get the costs in check.<p>Problem is even if they had 50% margin today they'd be valued at a very rich valuation. Long story short there's not much in the fundamentals other than pure hype holding up the value of the stock at this point.
I wonder if they're hobbling their user growth by not having some alternative lite app. I've come to associate their app with poor performance and battery drain while Facebook apps are relatively fine, perhaps with the exception of Messenger which they're slowly releasing Messenger Lite as an alternative.
Average revenue per user (ARPU) decreased 14% over Q4 2016.<p>DAUs increased 5% quarter-over-quarter.<p>$2B in employee stock compensation.<p>Net loss of $2.2B in this quarter alone....<p>This looks really bad.
Under "costs and expenses":<p><pre><code> General and administrative
Q1 2017: 1,174,476
Q1 2016: 24,011
</code></pre>
Am I reading this right? $1.2B? Is this because of the IPO?
Wow, company makes an app and is valued at 1/5th the value of GE, an international conglomerate making an enormous range of products.<p>Seems wildly over valued to me still. Compare to yelp even at a market cap of ~2b vs this 21b mkt cap behemoth. Yeah, time to short some Snap.
Amazing how you can have a $2 billion loss which represents a 2000% growth year-on-year and which is 15 times higher than the revenue and yet you label it as NM (Not Meaningful).
Plenty of Snapchat users (the ones who created the hype) are no longer teenagers. They are moving away from Snapchat to more concrete (perceived adult-ish) platforms like Instagram or not use them at all. Snapchat failed to evolve their product. I mean seriously do we really need those creepy glasses to record whomever you want?
really a net loss of two million on a revenue of 167000. that revenue is way too low for a company with global reach. a single person can make that much. my 'revenue' was 40k ish but at least i'm making a profit. so i'd be a better 'investment' than snapchat. sorry investors, currently not raising capital. literally anybody can do better than this. they will go the way of the dodo pretty soon.<p>ah ok...just saw that. dollars in thousands. that's slightly better but not really. my rating for this stock remains 'dodo'.
"User profiles with persistent content, what's the point of that anyway," said Snapchat. "Oh look, our users are ephemeral too."
Cash and equivalents went up by $1.3Billion - they're just stocking money in a cookie jar and declaring it as a loss? Great company for stock owners!
Snapchat will quickly learn than obfuscating growing losses with "Not Meaningful" is swiftly punished by investors...<p>I know it's not the main reason for the -23% in premarket, but it show a certain culture and disdain for shareholders, in my opinion.
People keep mentioning that Facebook is taking their (few) features, but it's more than that. Snapchat has always had garbage UX, and for awhile people tried to claim this was a feature because it kept the olds off of Snapchat.<p>But Facebook takes user experience very seriously (hence why it is so huge), and even though Facebook does so many more things than Snapchat, it's easy to use.<p>My retirement-age Mom uses Facebook just about daily. I'm an older millennial (who builds software UIs), and I find Snapchat baffling to use. It's such a bad UX that I can't bring myself to want to use it.<p>Facebook is crushing Snapchat because it's more than just features that keep users coming back on a daily basis.