OHHH SNAP..the gains are not sneaky links

The App Snap and covert transmissions between creeping adults can no longer be synonymous with a bad moves or questionable acts of  indiscretion, at least for investors.  Finally, gains are being recorded and Snaps’ current position has investors seeing more than just ick.

Snap Inc., the parent company of Snapchat, saw its shares soar by up to 30%, epitomizing the firm’s history of significant shifts following quarterly reports. For ten of the past twelve reports since Q2 2021, the company experienced a double-digit percentage swing, ranging from nearly a 40% drop to a close to 60% increase.

Bloomberg data reveals that the company’s average price movement following earnings announcements stands at 19.8%. Among Snap’s top ten rivals in the Internet media & services sector, only Roku Inc. exhibits a comparable level of volatility with an average 16% shift. In comparison, the group average is roughly half that of Snap, at 10%.

Last Friday’s surge was propelled by Snap’s robust sales forecast, which allayed concerns over its future performance and led to at least one analyst raising their rating of the stock. Remarkably, this represents the first instance of the stock showcasing a positive reaction to results since April 2022.

For Q1 2024, Snap Inc. has outdone itself, producing an impressive 3 cents per share which exceeded the Zacks Consensus Estimate by a whopping 160% – a year on year rise of 200%.

Moreover, the firm experienced a revenue surge of 20.9% over the previous year, reaching $1.19 billion, and overtaking the Zacks Consensus Estimate by 6.79%.

On a daily basis, an incredible 422 million users were active during the quarter, a significant 10.2% lift from the year prior. Snap Inc. added 39 million daily active users on a year-over-year basis.

Geographical revenue also displayed an uptrend with North America witnessing a 16.1% increase to $743.13 million (making up 62.2% of total revenues) while Europe saw a 24.1% rise to $195.8 million (constituting 16.4% of the revenue). Revenues from the rest of the world were an impressive $255.8 million, up 34% year on year.

User revenue per person also grew, with a 13% year on year increase to $1.13. The ARPU of North America, Europe, and the Rest of the World saw increases of 16.8%, 20%, and 13%, respectively.

Snap saw a boost in user engagement in Q3 with North America’s DAU steady at 100 million, Europe’s DAU rose 3.2% to 96 million, and the Rest of the World’s DAU shot up 18.9% to 226 million.

Snap Inc. joined forces with Traackr, Lumen Research, OMD, Amplified Intelligence, and Fospha in Q1 to add more campaign tools and insights.

Furthermore, the Snapchat+ subscription service garnered over nine million paying subscribers in Q1 and made significant strides in diversifying revenues with Snapchat+, ARES, and sponsored AR advertising.

The quarter also saw a surge in creators posting on Snapchat, with U.S-based Snap Stars posting over 55% more Public Stories year on year in Q1 2024.

Coming to the operation side, Snap Inc. saw a 30.6% year on year increase in non-GAAP based revenue cost to $574.7 million in Q1. Operating expenses were 4.3% higher than the previous year at $953.3 million.

Sales and marketing expenses increased to $276 million (2.8% increase), general and administrative expenses rose 19.5% to $227.5 million, while research and development expenses saw a slight decrease of 1.2% to $449.8 million.

Adjusted EBITDA rose notably from $1 million to $45.7 million over the year.

As of March 31, 2024, Snap Inc. had $2.9 billion in cash, cash equivalents, and marketable securities, compared to $3.5 billion at the end of December 2023.

Operating cash flow for Q1 2024 was $88 million, compared to $151 million the previous year.

Free cash flow was also lower at $38 million, compared to $103 million in the year-ago quarter.

Moreover, Snap Inc. repurchased 21 million shares, spending $235 million, bringing the average share repurchase price to $11.19 in Q1.