Suspense for Snap Investors: On Tuesday evening, the presentation of the balance sheet for the fourth fiscal quarter of 2023 caused excitement. The parent company of Snapchat reported an EPS of -$0.15, marking another period of losses.
Compared to the previous year, when a loss of $0.180 per share was recorded, the company was not quite able to meet the expert estimates of -$0.175. The total loss amounted to $248.3 million, while it was $288.5 million the previous year.
Overall, Snap generated revenues of $1.361 billion in the reporting quarter, missing market expectations of $1.37 billion. In the comparable period of the previous year, revenue was $1.30 billion.
The full year 2023 ended with a revenue of 4.606 billion US dollars, slightly below the analyst estimates of 4.62 billion US dollars, but still slightly above the previous year's figure of 4.60 billion US dollars.
The loss per share was 0.82 US dollars, thus lower than in the previous year (-0.890 US dollars per share) and below analysts' expectations (-0.857 US dollars per share).
Previously, Snapchat was a rapid growth engine, but now advertising money is increasingly flowing to the major competitors of Facebook's parent company Meta and Google. Meta saw a revenue increase of 25 percent last quarter, which led to a rise in the stock.
Snap CEO Evan Spiegel Tries to Counteract with Cost-Cutting Measures. In August 2022, Around 20 Percent of Jobs Were Already Cut. Now, Snap Announced to Lay Off Another 10 Percent of the Workforce. This Implies that by the End of December 2023, Just Under 5300 Employees Will Still Be Working at the Company.
The investors were shocked by the unexpectedly high loss forecast for the current quarter. Snap expects revenue between 1.095 and 1.135 billion dollars and a loss before interest, taxes, depreciation, and amortization between 55 and 95 million dollars. However, analysts had expected a loss of just 33 million dollars.
The daily number of users is expected to increase by 6 million to 420 million. Snap attributed the increased user numbers partly to more small and medium-sized enterprises using the platform as advertising customers. The number of paying users for the subscription offer with extended features now stands at 7 million.
Snap Stock Records Significant Decline in Pre-market Trading on NYSE on Wednesday, At Times Falling by 31.58 Percent to 11.94 US Dollars. Investors React to the Disappointment over Business Results and the Uncertain Outlook for the Current Quarter.
