Snap Inc (NYSE: SNAP) stock fell over 6.6% in the pre-market session of Feb 5th, 2021 (Source: Google finance) after the company provided a first-quarter adjusted EBITDA forecast that was much lower than analysts’ consensus expectations. The company’s net loss fell to $113 million, down more than 53% from a $241 million net loss last year. Snap has reported 265 million daily active users, up more than 6% from the 249 million the company reported in October. That figure is up about 22% compared to the 218 million daily users the company reported a year prior. For the fourth quarter, the company has reported the Average revenue per user (ARPU) of $3.44 compared to $3.34 forecast by FactSet. DAUs were 265 million in Q4 2020, an increase of 22%, year-over-year. The company’s operating cash flow increased by $14 million to $(53) million in Q4 2020, compared to the prior year. Free Cash Flow also increased by $7 million to $(69) million in Q4 2020, compared to the prior year.
SNAP in the fourth quarter of FY 20 has reported the adjusted earnings per share of 9 cents, beating the analysts’ estimates for the adjusted earnings per share of 7 cents, according to Refinitiv. The company had reported the adjusted revenue growth of 62 percent to $911 million in the fourth quarter of FY 20, beating the analysts’ estimates for revenue of $857.4 million. The company delivered Adjusted EBITDA of $166 million in Q4 2020, compared to $42 million in the prior year.
Snap projected that it would lose between $50 million and $70 million on an adjusted EBITDA basis in Q1, well shy of analysts’ consensus expectations of an adjusted EBITDA profit of $19.3 million, according to Refinitiv. Snap expects year-over-year revenue growth of 56% to 60% for the first quarter, to be between $720 million and $740 million, compared to $462 million in Q1 2020. The company also expects to reach approximately 275 million DAUs in the first quarter.
The company’s performance in the first quarter could be affected by two key factors. First, the company experienced two weeks of interruption to advertising demand as brand advertisers paused campaigns in the period after the Jan. 6 insurrection at the U.S. Capitol. Further, the company warned that Apple’s privacy changes in iOS 14, which are projected to take effect late in the first quarter, “present another risk of interruption to demand.” Those changes could affect the social media companies’ ability to target ads to users.