Snap Inc .’s (NYSE:SNAP) shares nosedived 31% in pre-market Wednesday trading after the social media company missed revenue expectations in Q4 and forecasted a wider-than-expected EBITDA loss for the March quarter.
For Q4, the social media company posted adjusted earnings per share (EPS) of 8c, compared to 14c in the year-ago period and the 6.4c expected by analysts. Revenue came in at $1.36 billion, up 4.7% year-over-year but below the consensus estimates of $1.38 billion.
The company’s revenue in the North America region stood at $899.5 million, up 2.2% YoY, and ahead of the projected $875.9 million.
Adjusted EBITDA was reported at $159.1 million, down 32% YoY and better than the expected $111.8 million.
Snap reported 414 million daily active users (DAUs) for the quarter, up 10% from the year-ago period, and compared to 411.59 million consensus. Average revenue per user fell 5.2% YoY to $3.29, and missed the expectations of $3.33.
The firm’s free cash flow for the quarter rose 41% from last year to $110.9 million, while analysts guided for $82 million.
For the fiscal Q1, Snap expects revenue in the range of $1.10 billion to $1.14 billion, compared to the consensus projection of $1.11 billion. Adjusted EBITDA loss is projected to range between $55 million and $95 million, significantly above the estimated $32.7 million.
Snap expects 420 million DAUs in the first quarter, exceeding the forecasted 418.55 million.
"We estimate that the onset of the conflict in the Middle East was a headwind to year-over-year growth of approximately 2 percentage points in Q4,” the company said in the statement.
"One learning. When a company announces a 10% RIF the day before an EPS release, there’s a decent chance that EPS release will be negative," analysts said in a note, referring to Snap's announcement referring to job cuts.
"We continue to prefer PINS to SNAP. Valuation is easier with the first, and the execution improvements seem more tangible, and the Amazon partnership provides a clearer catalyst. That said, we are encouraged to see strong Spotlight engagement trends (time spent up 175% Y/Y) and solid overall growth in total time spent watching content."
Stephens analysts reiterated an Overweight rating on CMG after earnings. In their preview of the restaurant chain's results, they said the company appears one of the "best-positioned to deliver upside to same-store sales and/or EBITDA & EPS."