Skip to main content

Snap Shares Tank After Posting Wider Than Expected Loss, Weak Guidance

Snap continues moving closer to profitability, but still lost more money than Wall Street had anticipated in the quarter.

Shares of Snap fell after the company lost more money than expected and issued guidance below what analysts had hoped for. 

The stock fell 12.33% to $16.64 a share in postmarket trading Tuesday, after having risen 4.06% in regular trading hours. 

Losses per share for the December quarter came in at 17 cents on a GAAP basis, wider than Wall Street's expected loss of 12 cents. Adjusted loss per share was 3 cents, against analysts expectations of a 1 cent profit. 

Revenue grew 44% to $561 million, missing analysts forecasts of $563 million. Daily active users grew 17% to 218 million, above estimates of 214.74 million. Average revenue per user was $2.58, growing 23% but missing analysts estimates of $2.62 . 

TheStreet Recommends

Management guided for current quarter revenue with a midpoint of $460 million, below analysts' estimates of $461 million. Adjusted EBITDA loss is expected at a mid point $80 million, a larger loss than analysts hopes of $72 million. 

Snap burned $75 million of cash in the December, against expectations of $31 million, with the result improving over last year's negative free cash flow of $148 million. 

"In 2019 we saw momentum across the board. We grew our community by 31 million daily active users, accelerated our revenue growth, and progressed towards profitability by improving full-year Adjusted EBITDA by 65% year-over-year,” said CEO Evan Spiegel in a statement. “The strength in our core business gives us confidence in our long term growth and profitability and we’re excited to build on these results in 2020 and beyond.”

Heading into earnings, the stock was up 12.8% year-to-date, far outpacing the broader U.S. market.