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Snap reported adjusted earnings per share of 1 cent versus a loss per share of 1 cent expected by analysts surveyed by Refinitiv.
Snap Inc (NYSE: SNAP) shares edged higher on Thursday to close the day trading at $10.50, up 6.28 percent. However, the gains had been obliterated during Thursday’s extended trading period, with Snap shares down about 18.29 percent to trade around $8.58 as of Apr 27, 2023, 7:59 p.m. EDT. The sudden nosedive was attributed to first-quarter financial results that missed Wall Street’s expectations. For Q1 2023, Snap reported revenue of $989 million vs $1.01 billion expected by analysts surveyed by Refinitiv.
The social media platform also missed its Global Daily Active Users (DAUs) which came in at 383 million versus 384 million expected by analysts surveyed by StreetAccount. Additionally, the company’s average revenue per user during the first quarter was $2.58 versus the $2.63 expected by analysts surveyed by StreetAccount.
Nonetheless, the company noted that it is working on diversifying its revenue collection avenues through the use of artificial intelligence.
“We are working to deepen engagement with our content platform while building innovative new features and services like My AI,” said Evan Spiegel, CEO. “We are working to accelerate our revenue growth and we are using this opportunity to make significant improvements to our advertising platform to help drive increased return on investment for our advertising partners.”
Notably, Snap reported adjusted earnings per share of 1 cent versus a loss per share of 1 cent expected by analysts surveyed by Refinitiv. Forward, the company declined to provide formal guidance for revenue or adjusted EBITDA for the second quarter of 2023.
Snap and Key Highlights for Q1 2023
During the first quarter, the company introduced 3D to the Snap Map to make the social media platform more engaging to the users. Additionally, the company introduced a Content Controls feature in Family Center to help parents oversee the type of content their teens are exposed to.
In order to diversify its future revenue growth, the company transitioned to a new ad format for Snapchatters that aligned ad design with content design. Interestingly, the company’s Snapchat+, a subscription-based service, reached more than 3 million users during the first quarter. In the Augmented Reality (AR) section, the company launched AR Enterprise Services (ARES) during the first three months of the year. Additionally, Snap unveiled Ray Tracing, a photorealistic quality on digital objects, on Lens Studio to developers around the world. During the first quarter, the company announced it integrated Snap AR with Disguise, an industry leader in live event visualization technology. The company also partnered with the NFL to create a 3D model of the State Farm Stadium.