Snap Inc (NYSE: SNAP) stock rose over 5.1% in the pre-market session of April 23rd, 2021 (as of 08:33:14 UTC-4 · USD; Source: Google finance) as the company posted better than expected results for the first quarter of FY 21.
Snap’s net loss narrowed to $286.9 million in the first quarter of FY 21, from $305.9 million, a year earlier. The company’s community grew to 280 million daily active users in Q1, which represents an increase of 22% year-over-year on both iOS and Android platforms. In North America, DAU grew by 5% year-over-year to reach 93 million. In Europe, DAU grew by 9% year-over-year to reach 77 million. In Rest of World, DAU grew by 57% year- over-year to reach 111 million. The company posted gross margins of 47% in Q1, which represents an increase of approximately 1 percentage point year-over-year. The company continues to make substantial progress against the goal of driving down the underlying infrastructure unit costs over time.
Moreover, the company reported negative adjusted EBITDA of $2 million in Q1, which represents an improvement of $80 million year-over-year as the company continues to grow the top-line rapidly while scaling the cost structure efficiently. Q1 marked the company’s first ever quarter of positive free cash flow as a public company at $126 million, which represents an improvement of $131 million year-over-year. The company ended the quarter with $2.6 billion in cash and marketable securities, up from $2.1 billion in the prior year.
SNAP in the first quarter of FY 21 has reported the adjusted earnings per share less than 1 cents, beating the analysts’ estimates for the adjusted loss per share of 6 cents, according to analysts surveyed by Zacks Investment Research. The company had reported the adjusted revenue growth of 66 percent to $770 million in the first quarter of FY 21, beating the analysts’ estimates for revenue of $739.5 million. In North America, revenue grew 75% year-over-year in Q1, while ARPU grew 66% year-over-year. In Europe, revenue increased 49% year-over-year in Q1, while ARPU increased 36% year-over-year. In Rest of World, revenue rose 46% year-over-year in Q1, representing a 19 percentage point acceleration in growth over the prior quarter
The company expects second-quarter daily active users to grow 22% to 290 million, and revenue to be in the range of $820 million to $840 million. For the second quarter of FY 21, the company expects adjusted EBITDA to be between $(20) million and breakeven, compared to $(96) million in Q2 2020.