(Ap) – Snap, Inc. SNAP-in.N) on Tuesday forecast fourth-quarter revenue largely below Wall Street estimates, sending its shares down 5 percent in after-market trading.
FILE PHOTO: A woman stands in front of the logo in a Snap, Inc. on the first floor of the New York Stock Exchange (NYSE) while waiting for the Snap, Inc. in order to post to their initial public OFFERING in New York City, NY, USA, 2nd March 2017. REUTERS/Lucas Jackson
The parent company of messaging app Snapchat is estimated to be in the fourth quarter, with a revenue of $540 million to $560 million, the midpoint of which is lower than the analysts ‘ estimate of $555.4 million, according to IBES data, Refinitiv.
The outlook is clouded Snap of the third quarter, released on Tuesday, showed greater-than-expected growth in daily active users. Wall Street is also up for Snap, an estimate of the achievement of profitability in the fourth quarter, as measured by earnings before interest, taxes, depreciation, and amortization (EBITDA).
In a conference call with analysts, Snap’s Chief executive Officer (ceo), Derek Andersen, said that the company is in the peak advertising demand, period of time between Black Friday and December holidays, and had one less week this year, and it was represented in the form of a “downturn” in the guidance.
Snapchat, popularized by pictures, visual effects, giving users the ability to change gender in the pictures, or to add a dog to the filter on their faces, it was with a 210-million-daily-active users for the third quarter ended Sept. 30 of 203 million euros in the last quarter of the year.
It was the 186 million users in the year-ago quarter.
The song is a very popular metric due to the investors, and advertisers, and was above the analysts’ average estimate of 206.6 million, according to IBES data, Refinitiv.
Snapchat is facing competition from a number of other apps in the highly sought after younger demographic, including those of Facebook Inc’s (FB.D) Instagram, and mobile apps, such as the TikTok, which is used for the making and sharing of short, lip-sync, comedy, and the talent of the video.
Investors still have to be careful with the Snap, given the company’s turbulent past, and an “illegal user engagement, inclusion,” said Haris Anwar, an analyst with the financial markets platform Investing.com.
“A slight miss on expectations would be enough to reduce the pain of inventory, and to revive the old memories,” he said.
The business of the company is largely due to the sale of advertising space on the app, which is a jump of about 50%, to $446.2 million in the third quarter, beating the average analyst estimate of $435.05 million).
The average revenue per user jumped 33% to $2.12 during the quarter from a year earlier.
In the remarks, released prior to the conference call with analysts, Snap’s Chief Executive, Evan Spiegel, said this year has been the growth that the company has “a clear path to the Q4 adjusted EBITDA profitability.”
The net loss narrowed to $227.4 million, or 16 cents a share, from $325.1 million, or 25 cents a share, a year earlier.
Exclusive items that Get posted a loss of 4 cents a share, in the quarter of the year. Analysts had expected a loss of 5 cents per share.
Reporting Akanksha Rana, Bengaluru, Sheila Dang, in New York; Editing by Mark Kuber, Richard Chang and Chris Reese