Snap Flies Higher After Q4 Report Shows No Loss In Daily Active Users

Shares of social media company Snap Inc (SNAP), which owns Snapchat, are higher in afternoon trading after reporting fourth quarter earnings after the market close on Tuesday.

Q4 RESULTS, Q1 GUIDANCE: Snap reported Q4 adjusted earnings per share of (13c) on revenue of $389.82M, against consensus estimates of (8c) and $375.82M, along with Q4 free cash flow up $49M to ($149M). Notably, Snap reported Q4 daily active users, or DAUs, of 186M, vs.187M last year and 186M last quarter. The company also gave guidance for the next quarter, seeing Q1 revenue in the range of $285M-$310M, against a consensus of $307.18M, and seeing Q1 adjusted EBITDA between ($165M) and ($140M) vs. ($218M) last year.

MANAGEMENT COMMENTARY: Snap CEO Evan Spiegel said, "We ended the year with user engagement stabilizing in advance of the broad rollout of our Android improvements, with overall Q4 daily active users flat quarter-over-quarter and average time spent above 30 minutes per day... We are substantially closer to achieving profitability, with our Q4 adjusted EBITDA loss of $50M representing a 68% improvement when compared to Q4 of last year." He added, "We are seeing our investments in improving the Snapchat experience beginning to bear fruit on iOS. In Q4, our iOS daily active users increased both quarter-over-quarter and year-over-year, and average time spent on iOS grew faster during Q4 than it did last year. This is great progress following our redesign, and we look forward to continuing to grow engagement on our platform."

Snap interim CFO Lara Sweet noted, "Average revenue per user increased to $2.09, an improvement of 37% year-over-year and 31% sequentially... In terms of monetization, total impressions were up 179% year-over-year and 31% sequentially, while pricing was down 48% year-over-year and was up 3% sequentially... While we are not going to give specific guidance on daily active users, we are cautiously optimistic and we do not foresee a sequential decline in daily active users in Q1 2019."

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