Snap shares reacted with strong gains on strong first-quarter results and strong forecasts of 80% to 85% earnings growth in the second quarter, according to management expectations. Snap outperformed analysts on each of its key metrics.
Snap Inc. (SNAP) rallied sharply on Friday, offsetting last week’s decline as investors took stock of its financials.
Snap Key Figures for Q1 2021
For the first three quarters of this year, Snap reported a break-even per share, while analysts’ average estimates boiled down to a 6 percent loss per share.
Revenues were up 66% year-over-year to $ 770 million, beating Wall Street’s $ 743.8 million expectations.
Snap’s quarterly earnings and earnings statistics for the last 2 years are available here.
Snap maintained a strong global active user (DAU) growth rate of 22% to 280 million, up from analysts’ forecast of 275 million. Growth was driven mainly by international user additions, while North America and Europe increased by a modest 5% and 9%, respectively.
Below is a table of fin. Snap report with statistics for the last two years.
Snapchat’s median revenue per user in the first quarter of 2021 was $ 2.74, slightly above the $ 2.72 projection.
Snap management and analyst comments
Snap’s management has made several important claims, including that the number of users of the Snapchat app on Android devices has surpassed the user base on iOS. This is very significant for Snap, which has long experienced poor user growth due to issues with the Android version of its app.
2020 was a very successful year for Snap, with stocks growing more than 200%, revenues up 46% (compared to 2019), and daily active users growing at a fast pace.
“We kicked off 2021 with the highest annualized revenues and record DAU growth, and for the first time in Snap’s history as a public company, we achieved positive free cash flow,” said Snap CEO Evan Spiegel.
“Augmented reality remains one of our greatest opportunities as we look to the future,” Spiegel said, adding that the company is “excited to ramp up investments in augmented reality, mapping and content to drive growth.”
The successful report allayed investor fears that Snap’s growth will slow in 2021 when quarantine restrictions are lifted and consumers return to offline entertainment.
InvestorPlace analysts believe that “Snap is at its core a sharing app. The more consumers do something — like going to bars, restaurants, or on vacation — the more they use Snap to share those things. ”
“We see Snap as a big winner in resuming economic growth in 2021,” InvestorPlace wrote.
Snap’s forecast for the second quarter of 2021
The optimism is added by the words of the chief financial officer of Snap, Derek Andersen, that the company expects revenue growth in the second quarter in the range: 80% – 85%, which represents a sharp increase after growing 66% in the first quarter.
It is worth considering, however, that this surge is a contrast to the second quarter of 2020, when Snap’s revenues grew only 17%, as many advertisers have cut or even suspended their ad spend due to constraints and economic uncertainty.
However, Snap is clearly seeing significant momentum for advertisers, as its forecast for second-quarter revenues of about $ 830 million (midpoint of the forecast range) implies strong consistent revenue growth for the company from $ 770 million in the first quarter.
Snap also expects to achieve approximately 290 million DAU in the second quarter.
Snap shares are up 22.4% since early 2021, up over 280% over the past 12 months.