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SNAP Gearing Up to Report Q4 Earnings: What's in the Cards?
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Snap (SNAP - Free Report) is set to report fourth-quarter 2021 results on Feb 4.
The Zacks Consensus Estimate for revenues is currently pegged at $1.19 billion, indicating 30.83% growth from the year-ago quarter’s reported figure.
In the last reported quarter, Snapchat’s subscriber growth — reflected by Daily Active Users (DAUs) — increased 57 million on a year-over-year basis and 13 million sequentially. DAUs at the end of the third quarter were 306 million.
The Zacks Consensus Estimate for global DAUs is currently pegged at 315 million, indicating growth of 18.9% from the year-ago quarter’s levels.
The consensus mark for the bottom line has been steady at 9 cents per share in the past 60 days, indicating no changes year over year.
Let’s see how things have shaped up for the upcoming announcement.
Snap has been benefiting from a spike in the usage of Snapchat. The growing adoption of Snapchat among Gen Z (13-24 years) is expected to have driven DAUs, thus expanding the company’s advertiser base. It is a larger platform than Facebook, Instagram and Twitter among this demography.
The company is focused on continuously adding a set of innovative features like Lens Studio 2.0, Camera Kit, Snap Minis and Bitmoji for Games, making Snapchat more attractive for users and advertisers. With these recent launches, Snap is democratizing its augmented reality (AR) tools that are likely to drive user growth.
In the fourth quarter, the company announced the launch of Acardia — a new global creative studio for branded AR. Acardia will develop new technology and deliver innovative, impactful and effective AR experiences to agency and brand partners.
Snap had previously launched a suite of creative tools, including custom sticker and three AR-enabled lenses, that allows Snapchatters to fingerspell, honoring the International Week of the Deaf. Using SignAll’s AI and computer vision technology that recognizes and translates American Sign Language, these AR Lenses will inspire users to fingerspell their name and other common words like love, hug and smile. These new features were designed thoughtfully with feedback and ideas from deaf and hard-of-hearing employees at Snap. Initiatives like these are expected to boost user engagement and user base growth.
In the last reported quarter, Snap launched new Discover channels in 14 different countries, including 22 channels in India and the U.K.
In addition to the strong adoption of AR Lenses, Discover content and Shows are expected to have driven user growth.
The company also announced a new deal with Sony’s (SONY - Free Report) Sony Music Entertainment to include its music into Snap’s Sounds library.
Per the Sony-Snap partnership, Snapchat users will be able to include fully-licensed Sony Music artists’ tracks in their snaps, send them to other users or post them to Snapchat Spotlight.
Snap also revealed that it is working to create new AR music lenses. Soon Snapchat will feature Sound lenses with a pre-selected song embedded into the lens. The feature will transform till pictures to appear as if they are singing.
The growing Snap Originals content is also expected to have bolstered user engagement.
Two Snap Originals, Meme Mom and Honestly Loren, reached more than 10 million viewers each in third-quarter 2021.
In the to-be-reported quarter, Snap announced a list of new Snap Originals — Addison Rae Goes Home, Level Up with Stephen Curry, Ryan Garcia: The Fight Inside, Reunited and A Fighting Chance with Anthony Joshua.
The Zacks Consensus Estimate for third-quarter ARPU is pegged at $3.80, suggesting an increase of 10.5% from the year-ago quarter’s reported figure.
This Zacks Rank #4 (Sell) company entered into a partnership with Alphabet’s (GOOGL - Free Report) Google to introduce a new feature ‘Quick Tap to Snap’ on Google’s Pixel 6.
The Google-Snap partnership marks the first time when Snap has created a camera-mode version of Snapchat accessible directly from a phone lock screen. This will make Pixel 6 the fastest phone to make a Snap.
A steady ad-spending environment is expected to reflect on Snap’s fourth-quarter top line. Creator Marketplace, launched in the second quarter, is expected to have been a consistent key catalyst in the fourth quarter. Creator Marketplace integrates Creators directly into Snap’s advertising ecosystem for businesses to connect with Lens Creators, Lens Developers, Lens Partners and Snap Stars to elevate their marketing presence on Snapchat.
Advertising has been the only source of revenues for Snap, which has been facing significant competition from the likes of Twitter, Facebook and Google for ad dollars. Moreover, a persistent decline in price per ad impression is likely to have dented advertising revenues.
Image: Bigstock
SNAP Gearing Up to Report Q4 Earnings: What's in the Cards?
Snap (SNAP - Free Report) is set to report fourth-quarter 2021 results on Feb 4.
The Zacks Consensus Estimate for revenues is currently pegged at $1.19 billion, indicating 30.83% growth from the year-ago quarter’s reported figure.
In the last reported quarter, Snapchat’s subscriber growth — reflected by Daily Active Users (DAUs) — increased 57 million on a year-over-year basis and 13 million sequentially. DAUs at the end of the third quarter were 306 million.
The Zacks Consensus Estimate for global DAUs is currently pegged at 315 million, indicating growth of 18.9% from the year-ago quarter’s levels.
The consensus mark for the bottom line has been steady at 9 cents per share in the past 60 days, indicating no changes year over year.
Let’s see how things have shaped up for the upcoming announcement.
Snap Inc. Price and EPS Surprise
Snap Inc. price-eps-surprise | Snap Inc. Quote
Factors to Consider
Snap has been benefiting from a spike in the usage of Snapchat. The growing adoption of Snapchat among Gen Z (13-24 years) is expected to have driven DAUs, thus expanding the company’s advertiser base. It is a larger platform than Facebook, Instagram and Twitter among this demography.
The company is focused on continuously adding a set of innovative features like Lens Studio 2.0, Camera Kit, Snap Minis and Bitmoji for Games, making Snapchat more attractive for users and advertisers. With these recent launches, Snap is democratizing its augmented reality (AR) tools that are likely to drive user growth.
In the fourth quarter, the company announced the launch of Acardia — a new global creative studio for branded AR. Acardia will develop new technology and deliver innovative, impactful and effective AR experiences to agency and brand partners.
Snap had previously launched a suite of creative tools, including custom sticker and three AR-enabled lenses, that allows Snapchatters to fingerspell, honoring the International Week of the Deaf. Using SignAll’s AI and computer vision technology that recognizes and translates American Sign Language, these AR Lenses will inspire users to fingerspell their name and other common words like love, hug and smile. These new features were designed thoughtfully with feedback and ideas from deaf and hard-of-hearing employees at Snap. Initiatives like these are expected to boost user engagement and user base growth.
In the last reported quarter, Snap launched new Discover channels in 14 different countries, including 22 channels in India and the U.K.
In addition to the strong adoption of AR Lenses, Discover content and Shows are expected to have driven user growth.
The company also announced a new deal with Sony’s (SONY - Free Report) Sony Music Entertainment to include its music into Snap’s Sounds library.
Per the Sony-Snap partnership, Snapchat users will be able to include fully-licensed Sony Music artists’ tracks in their snaps, send them to other users or post them to Snapchat Spotlight.
Snap also revealed that it is working to create new AR music lenses. Soon Snapchat will feature Sound lenses with a pre-selected song embedded into the lens. The feature will transform till pictures to appear as if they are singing.
The growing Snap Originals content is also expected to have bolstered user engagement.
Two Snap Originals, Meme Mom and Honestly Loren, reached more than 10 million viewers each in third-quarter 2021.
In the to-be-reported quarter, Snap announced a list of new Snap Originals — Addison Rae Goes Home, Level Up with Stephen Curry, Ryan Garcia: The Fight Inside, Reunited and A Fighting Chance with Anthony Joshua.
The Zacks Consensus Estimate for third-quarter ARPU is pegged at $3.80, suggesting an increase of 10.5% from the year-ago quarter’s reported figure.
This Zacks Rank #4 (Sell) company entered into a partnership with Alphabet’s (GOOGL - Free Report) Google to introduce a new feature ‘Quick Tap to Snap’ on Google’s Pixel 6.
The Google-Snap partnership marks the first time when Snap has created a camera-mode version of Snapchat accessible directly from a phone lock screen. This will make Pixel 6 the fastest phone to make a Snap.
A steady ad-spending environment is expected to reflect on Snap’s fourth-quarter top line. Creator Marketplace, launched in the second quarter, is expected to have been a consistent key catalyst in the fourth quarter. Creator Marketplace integrates Creators directly into Snap’s advertising ecosystem for businesses to connect with Lens Creators, Lens Developers, Lens Partners and Snap Stars to elevate their marketing presence on Snapchat.
Advertising has been the only source of revenues for Snap, which has been facing significant competition from the likes of Twitter, Facebook and Google for ad dollars. Moreover, a persistent decline in price per ad impression is likely to have dented advertising revenues.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.