Snap Inc. Posts Q1 User And Revenue Surge As COVID-19 Provides Tailwind

delivered better-than-expected revenue in the first quarter, but slightly undershot Wall Street analysts' forecast for earnings (or lack thereof). Snapchat parent Snap Inc.
But he argued that Snapchat's young users will help "accelerate the digital transformation" and "jumpstart" an economic comeback. The outlook for the medium- to long-term as businesses recover from the effects of the virus and a battered economy is unclear, Spiegel conceded.
Advertising appeared to deliver meaningful revenue in the period, with upfront commitments doubling in 2020 compared with 2019. Twitter and Facebook have seen short-term declines in advertising, though most Wall Street and Madison Avenue analysts expect digital platforms to rebound more quickly than traditional ones in a recovery scenario. Peter Naylor, who headed up advertising at Hulu for more than six years, joined Snap this month as head of sales.
Communication with friends, the company said, increased by more than 30% in the last week of March compared to the last week of January, with more than a 50% increase in some larger markets.
"We are beginning to see the light at the end of the tunnel in terms of the immediate health crisis, with
On April 1, the company had pointed to a dramatic rise in usage of its social platform during the coronavirus lockdown, with group chats and communication between friends both hitting all-time highs. In a blog post, the company said usage was "surpassing our typical peaks on Christmas or major holidays."
Snap recorded a loss of eight cents a share, which was wider than analysts' expectation of a 7-cent loss, but it marked an improvement from a year ago, when the loss was 10 cents.
The third chapter will be the recovery, which we expect may be very fast for some businesses and much slower for others, and we are committed to helping our partners as we navigate this uncertain journey together."” /> "The next chapter will be figuring out what the new normal will look like, both from a logistical perspective as well as in regard to the physical and mental well-being of our team. the curve flattening in many cities and countries," Spiegel said.
More than 4 billion "snaps" were created each day during the first quarter, the company said.
"These high growth rates in the beginning of the quarter reflect our investments in our audience, ad products, and optimization, and give us confidence in our ability to grow revenue over the long term," he said. Spiegel noted that ad revenue posted stronger gains in January and February before slowing in March as advertisers pulled back amid the virus-prompted economic collapse.
"Our product has never been more important in people’s lives, especially for helping close friends and family stay together emotionally while they are separated physically," CEO Evan Spiegel said in prepared remarks released with the numbers. "We are seeing sustained communication volumes on our service that eclipse the peaks we see during major holidays."
The number of daily active users (DAUs) climbed to 229 million, which was ahead of internal guidance and a 20% leap from the same period a year ago. Snap finished 2019 with 218 million DAUs.
Total revenue came in at $462.5 million, a 44% gain from the same quarter a year ago. The company had projected quarterly revenue of $450 million to $470 million, higher than analysts' consensus for $431 million.
Shares in Snap jumped 18% in after-hours trading after closing the day at $12.44.
Pre-sold attractions like Comedy Central's The Daily Show are helping broaden the reach of Snapchat beyond its teen and Gen Z core. One data point that will interest Hollywood partners of Snap as well as brand marketers is the fact that view time among users aged 35 and up doubled in the quarter compared with the same period in 2019.

CBS And Viacom Stocks Dinged Again As Market And Media Sector Stabilize

Viacom Chief Bob Bakish Praises Troops At Town Hall After CBS Deal Reveal” />
CBS finished at $43.37, down nearly 3%, while Viacom ended at $25.95, also down a bit less than 3%. It was not an upbeat day for the soon-to-merge CBS and Viacom, however. The two companies saw their stock prices drop for the fourth trading session of the past five.
After the Dow Jones Industrial Average posted an 800-point loss on Wednesday, its steepest of 2019, the stock market stabilized Thursday and most media and tech shares saw their fortunes improve.
Stronger-than-expected retail data and a solid quarter for Walmart offered some reassurance Thursday about the state of the domestic economy. The Dow finished at 25,579.39, up just shy of 100 points, while the Nasdaq and S&P 500 were closer to break-even. Overall, the markets seemed more stable than they had been on Wednesday, when anxiety about data suggesting a looming recession sent investors to the sidelines.
The unveiling drew a few downbeat reactions on Wall Street but many analysts remain bullish on the benefits of the combination. Viacom and CBS on Tuesday finally announced their long-awaited plan to merge, with an expected close by the end of 2019.
Trading volume on both stocks on Thursday was about twice the average level. The downtrend in the companies' stocks leaves them both toward the low end of their 52-week ranges, and each has entered negative territory for 2019 to date.
posted a 2% drop. pulled back nearly 3% on the day and Snapchat parent Snap Inc. Fox Corp. The only company to see a bigger decline than CBS or Viacom was Lionsgate, which fell to a new 52-week low of $11 a share during the day before ending at $11.05, down 5%. Virtually all other media or tech issues wound up in positive territory on Thursday.

Global Stock Markets Crater On China Angst As U.S. Sees Sharp One-Day Drops

Traditional media players fared a bit better but were still dinged, mostly falling by a couple of percentage points.
President Donald Trump has vowed to implement more tariffs on China. The nations are several months into a clash over trade.
Stock markets in the U.S. slumped badly Monday, notching some of their worst single-day declines of 2019, during a global market correction spurred by increasing anxiety about U.S.-China trade relations.
companies faced a bigger challenge operating in China as the net effect of the currency drop is that prices for U.S. As the yuan fell to less than seven per dollar, U.S. goods increase.
Big tech was hit hard in the pullback. As a hardware leader, Apple has been seen as one of the most vulnerable U.S. companies in the new China-U.S. Netflix, Alphabet and Apple all shed between 4% and 5%, with social media firms Twitter, Facebook and Snap Inc. in slightly worse shape. environment.
The Nasdaq fell 3.5% to finish at 7,726.04, while the S&P 500 marked its sixth straight down day, wrapping up at 2,844.74, down 3%. The Dow 30 dropped about 3% to end at 25,717.74.
Prior to the rough day on Wall Street, several stock markets across the world had also registered declines.” />
The yuan, China’s unit of currency, reached its lowest level in more than a decade. With the OK from the government, the People’s Bank of China allowed the yuan to fall. Trump blasted the move on Twitter as a "major violation" and "currency manipulation."

Snap Inc. Beats Q1 Estimates And Returns To User Growth, Goosing Stock

Its loss per share narrowed to 10 cents, ahead of analysts' expectation of a 12-cent loss per share. The company reported a 39% increase in revenue over the prior-year period, to $320 million.
Following a strong fourth-quarter earnings report in February, Snap has seen its fortunes improve, dispelling much of the gloom that has hung over the company from late-2017 though all of 2018.
After the earnings news, it climbed as much as 10% in after-hours trading. The company's long-beleaguered stock, which bottomed out last December at just $4.82 a share, gained 4% during the regular trading session today to close at $11.99.
The tech startup’s stock price is still below the teens and low 20s, the level where it traded for more than a year after its IPO in March 2017. Still, it has more than doubled in 2019 to date.” />
CFO Tim Stone, poached from Amazon, abruptly resigned four months later, officially exiting in February. Snap was destabilized by a stream of top-level executive departures, a deeply unpopular redesign of its app in late 2017 and ongoing struggles to perfect an Android version of the service.
Analysts had forecast 187.2 million users. Investors latched onto one key stat, though: daily active users. The metric reached 190 million in the quarter ending March 31, which is higher than the 186 million of the fourth quarter but down a bit from the 191 million in the year-ago period, though it broke a three-quarter slump of sequential declines.
beat Wall Street estimates across the board with its first-quarter results, sending shares of the social networking company surging in after-hours trading. Snapchat parent Snap Inc.

Stock Market Retreats Again, Whacking Media And Tech Sectors

Snapchat parent Snap Inc., which hit an all-time low on Wednesday, bucked the trend by rising 3.5% to close at $6.82 as bargain-hunting investors took fliers on the troubled social networking company. Facebook and 21st Century Fox also managed small gains, each adding 1% on the day. Fractional gainers included Twitter, World Wrestling Entertainment, Live Nation and Sirius XM, but those few in the black were a distinct minority.
Fears about rising interest rates again prompted the heavy selling, with the arrival of corporate earnings season making investors worry about heavy debt burdens and questionable business models. The Dow 30, which see-sawed wildly over the course of the day, ended up at 25,052.83, down 545.91 points, or 2.1%. That was better than its 800-point plunge on Wednesday, but not by much.
Now more than 10% below its peak, the tech-heavy Nasdaq is officially in a correction. The Nasdaq Composite, the index that was the worst off on Wednesday, shed 93 points, or 1.25%, to finish at 7,329.06. The S&P 500 lost 57.31 points, a bit more than 2%, to 2,728.37, its sixth straight down session and worst losing streak since last November.
Today's stock market performance proved less dire than Wednesday's bloodbath, but the two-day swoon has now shaved billions from media and tech companies.
Tech stocks that are part of the S&P 500 on Wednesday fell nearly 5%, their worst performance since 2011. While their performance today was better, with Netflix slipping just 1.5% and Apple down less than a percentage point, technology remains a key battleground for buyers and sellers.
A surge in tech valuations in the first half of 2018 — with Apple and Amazon making history by reaching the $1 trillion valuation level — paced the overall market. But those advances have been accompanied by pessimism about a perceived market bubble, plus hostility from regulators and President Donald Trump over their alleged anti-conservative bias as well as their use of data and security protocols.” />
Among the hardest-hit stocks in the media and tech sectors: AT&T, down more than 3%; Lionsgate, off 6%; Amazon, down 2%; Comcast, down 2%; and CBS, which gave up 3%.

Snap Stock Hits New Low; Analyst Says It’s “Quickly Running Out Of Money”

Forecasting lower growth in revenue and users, Nathanson lowered his 12-month price target to $6.50 from $8, though he kept his neutral rating on the shares.
During the final hour of the session, shares dipped to an all-time low of $6.84. The stock dropped more than 6% today to close at $7, the lowest closing price since the company's IPO in March 2017. Trading volume was double the average level.
"If the current cash burn holds, Snap will have to raise new funding in the back half of 2019!" "As capital expenditures have remained relatively modest, the main culprit behind Snap's diminishing cash balance has been its core operations," Nathanson wrote.
Since going public, Nathanson contends, Snap has shown it is "not quite ready for the big leagues." Free cash flow has declined to negative $250 million per quarter in 2018, the analyst noted.
Nathanson cited a memo from Snap CEO Evan Spiegel that leaked last week. While the memo suggests Snap is "attempting to do the impossible," the analyst wrote, "Facebook is ramping [Instagram] Stories usage and monetization across its massive installed base." In it, Spiegel outlined 2019 goals of accelerating revenue growth while achieving positive full-year cash flow and profitability.
Veteran media and tech analyst Michael Nathanson put the social media giant on notice in a blistering note to clients, warning that the social media company is "quickly running out of money" and needs a "miracle" solution. Its war chest could be completely empty by 2020, he projected.
UPDATED with closing price: Shares in Snapchat parent Snap Inc. took a dive after a harsh report from a Wall Street analyst, who warned that the company is "quickly running out of money."
The "self-inflicted damage" of an unpopular app redesign in fall 2017, along with its forthcoming Android app, Nathanson said, has been accompanied by increased competition. Facebook-owned Instagram has increased daily active user levels for Stories to about 400 million in July 2018, from 250 million in July 2017.” />

Tech Stocks Get Blitzed As Regulatory Fears Come Back Online

“While these concerns are at least partially priced into stocks, they may continue to weigh on the largest internet names.” “While advertising-driven internet stocks have under-performed in recent months … we worry that regulatory concerns are unlikely to dissipate in the near term,” DiClemente wrote.
has been the hardest hit, reaching a new 52-week low of $7.61 before closing down 5% for the day at $7.80. Twitter dropped nearly 3% to $28.23. Facebook, despite owning Instagram, the social network with the best reputation on Wall Street, slipped 2% to $158.85. Snapchat parent Snap Inc.
The stocks of major tech companies, especially those of the major social media players, pulled back sharply today amid renewed fears that federal regulators could finally rein in their fast-growing businesses. UPDATED with closing prices.
He warned that the worst could be yet to come, especially for social media giants like Facebook, Snapchat and Twitter, all of whose 12-month price targets he lowered. While there are macroeconomic reasons for the declines, such as ominous Treasury statistics on government bond yields, Anthony DiClemente, a veteran tech analyst with Evercore ISI, issued a report that rattled investors.
Roku, whose shares had doubled since April amid the streaming video boom, fell a dramatic 8%. The damage was not contained to social media. This was a day when the Dow tumbled as many as 357 points before improving to finish off 200, and the Nasdaq had its worst single-day performance since June 25, dropping nearly 2% to 7,879. Netflix stepped back 3.5%. Tech giants like Apple, Amazon and Alphabet, which owns Google, all dipped well into the red.
President Donald Trump is planning a summit meeting with tech leaders, which will enable Administration officials to air concerns such as the oft-aired charge of anti-conservative bias. Trump has also frequently tangled with Amazon — via Twitter, of course.” />
When a Google rep declined to appear, his empty chair got a tongue-lashing worthy of Clint Eastwood at the Republican convention. Facebook and Twitter executives testified before a Senate committee last month that is examining their business practices.
elections. Also, the companies have faced harsh scrutiny from the federal government after data manipulation tactics have been exposed and their platforms have been hijacked by political partisans and foreign elements looking to sway U.S. Tech stocks have propelled the broader markets to several years of gains, but there are increasing concerns on Wall Street that the rally is becoming overextended on a technical basis.