How Snapchat Beat in Q1 Earnings?

JacksNiffler
04-26

$Snap Inc(SNAP)$ announced its Q1 financial performance, soaring 24% after hours.

The Q1 financial performance

  • Revenue saw a 21% year-on-year increase in first-quarter revenue to $1.195 billion, exceeding the expected $1.12 billion, mainly due to improvements in the advertising platform and increased demand for direct response advertising solutions

  • Adjusted EBITDA is $46 million, expected to be -$67.6 million. DAU is 422 million, market expectations were at 420 million.

  • Free cash flow is $38 million.

Content platform

  • Daily Active Users (DAU) reached 422 million, a 10% year-on-year increase in global content viewing time and audience numbers increased year-on-year,

  • Spotlight and creator stories contributing the most Focus is on deepening content engagement in three areas: personalized content ranking, support for creators, and improving social experiences

  • Using generative AI to bring new features and experiences to the community, such as enhancing photos with AI, generating AI subtitles and images, etc.

Ad AI platform

  • Continuously improving machine learning models, optimizing advertiser

  • Return on Ad Spend (ROAS), 7-0 pixel purchase optimization model conversion volume increased by over 75%

  • Introducing a brand new privacy-first first-party signal solution CAPI, with 300% year-on-year growth in integrations

  • Collaborating with advertisers to launch innovative ad products, such as IAS's brand safety third-party measurement products

  • Small business advertisers increased by 85% Launching new tools to make it easier for advertisers to create AR assets and launch AR activities

Q2 Financial Outlook

  • Estimated second-quarter DAU to be approximately 431 million, an increase of 15%-18% year-on-year Estimated second-quarter adjusted EBITDA is $15-45 million

  • Estimated full-year 2024 adjusted operating expenses of approximately $2.425-2.525 billion, share-based payment costs of approximately $1.13-1.2 billion

  • Overall, Snap made good performance progress in the first quarter, advancing in community growth, content engagement, and advertising platform improvements.

  • The company maintains a strategy of innovation and cautious investment, aiming for sustained profitability and positive cash flow.

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