Snap falls 3% on in-line second quarter guidance

Investing.com - Snap Inc. (NYSE: SNAP) reported first quarter results that exceeded analyst expectations, but shares fell 3% as the company’s second quarter revenue guidance came in roughly in line with Wall Street estimates.

The social media company posted a loss of -$0.05 per share for the first quarter, beating the analyst consensus of -$0.08. Revenue increased 12% YoY to $1.53 billion, slightly above the $1.52 billion estimate. The revenue growth marked an acceleration from recent quarters as the company returned to daily active user growth and expanded margins.

Snap’s stock declined following the earnings release, driven by second quarter revenue guidance of $1.52 billion to $1.55 billion. The midpoint of $1.535 billion falls slightly below the analyst consensus of $1.54 billion. The company noted its guidance assumes no contribution from Perplexity after amicably ending that relationship in the first quarter and accounts for continued headwinds in the Middle East region.

"In Q1, we returned to growth in daily active users, accelerated revenue growth, expanded margins, and generated strong free cash flow," said CEO Evan Spiegel. "We remain focused on disciplined execution as we invest in Specs and our long-term opportunity in intelligent eyewear."

The company reported adjusted EBITDA of $233 million, more than doubling from $108 million in the prior year. Free cash flow reached $286 million, up 150% YoY from $114 million. Global daily active users grew 5% YoY to 483 million, while monthly active users reached 956 million.

For the second quarter, Snap expects adjusted EBITDA between $175 million and $200 million. The company anticipates pre-tax restructuring charges of $95 million to $130 million related to a recent reorganization, with the majority incurred in the second quarter.

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