Snap shares fall over 10% after it misses earnings projections

By: Nicolas V.

Snap’s streak of strong earnings reports ended Tuesday, with shares sinking more than 10% on a fourth-quarter revenue miss.

The parent company of messaging app Snapchat, popular for its gender-bending face filters, brought in $560.9 million in revenue. Wall Street, meanwhile, had been looking for $563 million.

The decline came amid tough competition from digital advertising giants Google and Facebook, and was partly attributed to there being one week less than usual in the peak advertising demand period between Black Friday and the December holidays.

Snap also reported that daily active user numbers rose 4%, to 218 million, beating analyst forecasts of 215 million.

“Given the substantial long-term opportunities ahead, we are working hard to scale our revenue so that we are able to self-fund our investments in the future,” Chief Executive Evan Spiegel said in a statement.

Snap shares are up 174% from the year-ago earnings report, as it has stabilized user numbers and stopped hemorrhaging to rivals like Instagram, which has cribbed many of Snap’s most popular features such as disappearing photos and chats as well as face filters.

Snap’s net loss widened to $240.7 million, or 17 cents per share, from $191.7 million, or 14 cents per share, a year earlier.

The company expects first-quarter revenue in the range of $450 million to $470 million. Analysts on average are expecting $461.6 million.

While Snap has invested in a self-serve platform to make it easier for advertisers to buy ad space, it is still a long way from stealing ad dollars from Google and Facebook, which command a huge portion of the digital ad market.