Snap shares fell as much as 10% in after-hours trading Thursday after the company reported its fourth-quarter earnings despite the profit against Wall Street’s expectations for earnings, sales and User growth, however, the company released an adjusted EBITDA forecast for the first quarter that was well below analyst consensus expectations

Snap anticipated it would lose between $ 50 million and $ 70 million on an adjusted EBITDA basis in the first quarter, well below analysts’ consensus expectation of an adjusted EBITDA gain of $ 19 million, according to Refinitiv

The company’s net loss dropped to 113 million USD, a decrease of more than 53% against a net loss of 241 million USD in the previous year corresponds to

Snap reported 265 million daily active users, up more than 6% from the 249 million the company reported in October, a figure that’s up nearly 22% compared to the 218 million daily users the company entered Had reported the year before

Snap expects first quarter revenue growth of 56% to 60% year over year, Snap’s chief financial officer Derek Andersen said in pre-prepared remarks. The company also expects to reach approximately 275 million DAUs in the first quarter, said Andersen

However, the company’s performance in the first quarter could be affected by two key factors.First, Andersen emphasized that Snap experienced a two-week hiatus in ad request when brand advertisers paused campaigns in the period after the January 6 Uprising at the U.S. Capitol

“So we started the quarter more slowly than we otherwise expected,” said Andersen in his prepared remarks

In addition, Andersen warned that Apple’s privacy changes in iOS 14, expected to take effect by the end of the first quarter, “pose another risk of disruption to demand.” These changes could affect the ability of social media companies to Targeting ads to users

“It is not yet clear what the long-term impact these changes may have on the dynamics of our business, and it may not be clear for a few months or more after the changes are implemented,” said Andersen in his preparatory comments
On the call for results, Jeremi Gorman, Snap’s chief business officer, said that while Apple’s emerging privacy changes could disrupt the company’s advertising business, the decision to protect user privacy is in line with Snap’s business / p>

“The reality is that we admire Apple and we believe they are trying to do what’s right for their customers,” Gorman said on a call with analysts

Gorman added that Snap has worked with Apple to prepare for the changes, trained its advertisers, and made long-term investments to use more first-party data for advertising, and the company plans to give advertisers more opportunities to promote their To make products and services available to Snap users directly through Snapchat

“Overall, we feel very well prepared for these changes, but changes in this ecosystem are usually disruptive and the outcome is uncertain,” said Gorman

Nominations for the 2021 CNBC Disruptor 50 are open, a list of private startups using breakthrough technology to become the next generation of large publicly traded companies, sending by Friday, February 12 at 3 p.m. EST

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World News – US – Snap beats expectations but the stock falls to slight first quarter guidance

Source: https://www.cnbc.com/2021/02/04/snap-snap-earnings-q4-2020.html