Snap Inc (NYSE: SNAP) shares slipped Thursday, on reporting better-than-expected first-quarter results, highlighted by a 44% year-over-year increase in revenue and a 20% growth in daily active users.
Snap reported first-quarter revenue of $462.5 million versus expectations of $452.6 million, while adjusted EBITDA of $(81.2 million) was better than the $(86.3 million) expected. Net adds for Daily Active Users (DAUs) in North America rose by two million versus expectations of 1.1 million, while Europe also outperformed at three million versus 2.3 million.
Snap's management noted January and February revenue growth accelerated versus fourth-quarter results as the Snapchat platform evolved to become an "always-on channel" for new advertisers, the analyst wrote in a note. This solidifies the bullish stance that Snap's turnaround process is real.
In ad visibility, Snap noted it's doubled the amount of money committed via upfronts from advertisers year-over-year, and direct response advertising has nearly doubled its share of total revenue (and now makes up more than half of the total).
Revenue rose 44% despite 25% of digital ad categories (like hotels and film marketing) stopped advertising.
Snap is being viewed less by some experts as an "experimental" venue for advertisers and more of a "core ad partner."
Free cash flow of negative $5 million marks a "dramatic" improvement while Adjusted EBITDA margin improved "strongly" from negative 39% in the prior year to 18%.
Impressions nearly doubled in the quarter while average revenue per user rose 20% from last year to $2.02.
Shares dropped 37 cents, or 2.2%, to $16.67.
Tech Insider
