February 27, 2024


Snap CEO Evan Spiegel

“We aren’t as large as some players, but I think there’s enormous opportunity for us to continue to grow our business,” Snap CEO Evan Spiegel told investors on a call on Tuesday (Feb. 6).
Image: Nathan Howared (Reuters)

The stock of Snap, the parent of Snapchat, dropped over 35% during intraday trading on Wednesday (Feb. 7), a day after the company’s fourth-quarter earnings report failed to impress investors.

The social media company’s share price fell as low as $11.19 on Wednesday from its closing price of $17.45 on Tuesday. The last time Snap’s share price dropped below $11.30 was in November 2023.

Snap’s fourth quarter by the numbers

Snap’s revenue in the fourth quarter of 2023 rose 5% year-over-year to about $1.36 billion, from $1.3 billion, though it slightly missed Wall Street estimates of $1.38 billion, according to FactSet.

The company managed to narrow its net income loss by 13% to $248 million, down from $288 million in the prior year. This was Snap’s eighth quarterly loss in a row, though it beat investor expectations of a $280 million loss.

The company’s earnings per share came to a loss of $0.15, barely outperforming Wall Street expectations of a $0.17 per-share loss, according to a consensus estimate from analysts surveyed by FactSet.

In addition, Snap projected its revenue for the first quarter of 2024 to land between $1 billion and $1.3 billion. It estimated its adjusted EBITDA will come between a loss of $55 million and $95 million, well above Wall Street estimates of a $69 million loss.

Snapchat is struggling to keep up with competitors

Snapchat continues to lag behind its competitors in generating advertising revenue. For comparison, Meta earned $39 billion in revenue via advertising alone in its fourth quarter.

“We aren’t as large as some players, but I think there’s enormous opportunity for us to continue to grow our business,” Snap CEO Evan Spiegel said during a call with investors in response to a question about whether the company’s smaller scale relative to its competitors is limiting its potential growth.

The news also comes just days after the company announced it would be laying off 10% of its workforce.



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