Snapchat blew its first-ever earnings – ANITH
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Snapchat blew its first-ever earnings

Snapchat blew its first-ever earnings

Image: kerry flynn/mashable

Snapchat found more friends and made some money — but far far fewer than analysts had hoped. It’s not good.

How bad? Really bad. Snapchat shares dropped 20 percent just minutes after the earnings were first released.

Snapchat is now at 166 million daily active users. JPMorgan had expected Snapchat to reach 169 million daily active users, an 8 million increase from the 161 million the company reported when it filed to go public. 

That’s under expectations and far under Facebook’s more than 1 billion daily active users and nearly 2 billion monthly active users. It’s also far below Instagram’s more than 400 million daily active users, 200 million of whom watch Instagram Stories, its copycat version of one of Snapchat’s core products. 

In case you didn’t realize it, Snapchat makes money, primarily via advertising and by selling video-camera sunglasses. Snapchat brought in $149.6 million from January to March. 

But Snapchat was expected to bring in $158 million, according to analysts polled by Thomson Reuters. That’s a good bump up from the $38.8 million Snap pulled in a year prior, but again, it’s a far cry from what analysts had expected. 

Snapchat isn’t profitable. Analysts polled by Thomson Reuters expected Snapchat to post a quarterly loss of 19 cents per share. One of the biggest costs it has, according to its S-1 filing, is Google Cloud services. 

For the stock price, Snap’s shares were priced at $17 but when it began trading on the New York Stock Exchange in March it increased to $24. The price spiked at more than $29 and closed on Wednesday at $22 but plummeted by more than 17 percent in after-hours trading. 5b24 3f9e%2fthumb%2f00001

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Anith Gopal
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