“Snap Q1 2023 Results Disappoint Estimates and Value Falls -21% in Aftermarket”

SNAP (Close: $10.50; Day Var.: +6.3%; 2023 Var.: +17.3%). Q1 2023 results disappoint estimates and value falls -21% in the aftermarket: Main figures compared to Bloomberg consensus: Revenues $988M (-7% y/y) vs. $1,001M expected, BNA -$328M (vs. -359M$ in 1Q 2022) vs. -$360M spec. and EPS -$0.21 (-$0.22 in 1Q 2022) vs. -0.18$ esp. OPINION: Weak figures and lower than estimated. Ad revenue suffers more than anticipated in Q1. In addition, the Company warns that the next quarter will also be weak.

Guidance for Q2 points to $1.04B in revenue, equivalent to a -6% yoy decline, vs. $1.100M consensus estimate. On the user side, they remain in line with expectations: 383M active users in the quarter vs. 383.2M estimated.

Time of use increases, but average revenue per user falls (down to $2.58 from $3.20 in 1Q 2022 and vs. $2.62 estimate). Looking ahead to 2Q, it anticipates that daily active users will reach 394M/395M. In short, bad figures that cause a drop of -21% in the aftermarket. Link to the note published by the Company.

#Snap ($SNAP).- Stock prices fell after first-quarter revenue missed Wall Street expectations. Snap’s revenue fell 6% from a year earlier to $989 million, as analysts had expected $1.01 billion.

— VectorAnálisis (@VectorAnalisis) April 28, 2023

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(Close: $112.91; Day Var.: +7.38%; 2022 Var.: +34.4%). The results for 1Q 2023 are better but the group anticipates a further slowdown in its cloud business. It falls -2% in the after-market. Main figures against consensus (Bloomberg): Sales $127.4bn (+9.4% YoY) vs $124.705bn (+7.1%) expected; EBIT $4.8bn (+30%) vs $3.002bn expected; BNA $3,172M vs. $3,130M expected. In Q2 2023, the company forecasts Revenues of $127bn/$133bn (vs $130.1bn expected), and EBIT of $2bn/$5.5bn (vs $4.74bn expected by consensus).

Sales exceed expectations, but the forecasts for the cloud computing division are for a further slowdown to single-digit rates (vs +40% at the beginning of 2022)

The group said that sales in April were already 5% lower than in 1Q23. Costs are growing at the slowest rate in a decade (+8.7%), giving relief to margins in a context of the largest restructuring plan in the group’s history, which includes a workforce reduction of 27,000 people, 10% of the total. Cloud business division sales up +16% to $21.4B vs. $21.03B expected; those of the electronic commerce platform amount to 51,100 M$ vs. 50,570 M$ expected. The EBIT Margin begins to show signs of recovery, 3.7% vs. 3.2% in 1Q22 and 2.4% expected.

Revenues from the cloud computing division (business in the cloud) grew +16% to $21.4bn vs. $21.03bn expected, although it is the 5th quarter in which the growth rate is slowing down. Advertising revenues amount to $9,510 million (+21%); sales on the online platform amount to $51,100M vs $50,570M expected. By geographic area, Revenues in North America amount to $76.88M (+11%) vs. $75.540M expected and international business to $29.12Bn (+1.3%) vs. $27.650M expected, reflecting the group’s difficulty in replicating the business model outside the US The EBIT Margin in the US beats expectations (1.2%% vs +0.34%) showing progress in cost containment; that of the international business, also beat but remains negative (-4.3% vs. -8.5% expected). After a recovery in Q3 2022, the group returns to growth