Snap reports Q3 revenue up 6% YoY to $1.13B, vs. $ 1.14B est., DAUs up 19% YoY to 363M, vs. 358.2M est., a $360M net loss, up from $72M YoY; stock is down 25%+
Snap entered Q3 after a Q2 revenue shortfall despite daily-user growth and a sharply wider loss. The new results extend that mismatch: its audience is expanding faster than its revenue is meeting expectations.
The contrast is sharper against Snap's 2021 quarter of 116% revenue growth, when user growth coincided with a narrowing loss. Q3 makes profitability and monetization, rather than audience scale alone, the immediate issue.
First-order effects
Snap's more than 25% stock decline immediately raises the cost of disappointing investors after revenue missed estimates, even as DAUs exceeded expectations.
Snap's widened net loss puts management under pressure to convert its 363M daily users into revenue growth that outpaces operating losses.
Second-order effects
Snap's Q2 and Q3 revenue misses shift the company's performance benchmark toward monetization and cost discipline, since above-estimate DAU growth has not prevented investor selling.
The widening loss reduces the cushion for Snap to sustain spending at the pace implied by its expanding user base without showing stronger revenue conversion.
Third-order effects
If Snap continues to add users while revenue growth slows and losses widen, social-platform valuations will place less weight on audience growth and more on the economics of each active user.
The sequence from the Q2 revenue miss to Q3 suggests that quarterly earnings reactions are becoming a direct test of whether platform scale can translate into durable financial performance.
The trend: Social platforms are moving from growth-at-scale narratives toward investor scrutiny of whether user expansion produces revenue growth and narrower losses.
Social media and digital ads for the past decade has attracted the best minds in tech. Will be very interesting to see where that talent would migrate next. The industry that will define tech for the coming decade. https://twitter.com/...
I expect this situation to last for a long time, till a new platform comes. Is Generative AI/LLMs the new platform? It is half of a new platform - the other half are better control systems. Till that second half is done, I don't think it will be so category changing. https://twit…
The amount of value destroyed by Apple's ATT across e-commerce and social apps will tally up to trillions when the final accounting is done. https://twitter.com/...
Snap reported its slowest quarterly sales growth today since going public and said it's operating with the assumption that growth will be flat in the current quarter. Shares have slumped more than 20% in after-hours trading in the last 5 mins https://www.wsj.com/...
Tim Cook is basically the Xi Jinping of America, destroying trillions of enterprise value in the tech sector by messing with big tech companies. What's great about America is we do all this in the private sector though. https://twitter.com/...
$SNAP reported $72.6 million in adjusted EBITDA. That includes $312 million in stock based comp (about 30% of sales) & then another $154 million in re-structuring charges. It's net income margin was -32% at a quarterly revenue run rate over $1 billion. Yikes.
deja vu folks: July 21: SNAP Craters 25% After Reporting Weakest-Ever Growth, Removes Q3 Guidance, Drags Down All “Socials” Oct 20: SNAP Craters 25% After Reporting Weakest-Ever Growth, Removes Q4 Guidance, Drags Down All “Socials”
The $SNAP tank seems to know no end. At its after-hours level, this would be the lowest close since Feb. 7, 2019. Down an astounding 83% ytd. via @JonathanVanian https://www.cnbc.com/... https://twitter.com/...