Snap Q1 daily active users jumped by 22% to 280 million, topping estimates
Snap (SNAP) reported fiscal first-quarter results that exceeded expectations, reflecting still-strong revenue and user growth amid ad product improvements and heightened engagement during the pandemic.
Here were the main metrics from Snap's report Thursday evening, compared to consensus estimates as compiled by Bloomberg:
Q1 Revenue: $769.6 million vs. $743.97 million expected and $462.48 million Y/Y
Q1 Adjusted earnings per share: breakeven,vs. loss of 6 cents expected and loss of 8 cents Y/Y
Daily active users: 280 million vs. 275.4 million expected and 229 million Y/Y
Like many other social media platforms, Snap, the parent company of the disappearing image-sharing app Snapchat, benefited from a rise in adoption and engagement during the pandemic as users stuck at home sought out entertainment online. Daily active users increased between 17% and 22% year-over-year in every quarter in 2020, for growth rates well above those from 2019. Snap was expected to have grown its user base by another 20% in the first three months of 2021.
And Snap has remained popular among one of its most lucrative cohorts — teen users. Snap remained the most popular social media platform among U.S. teens between mid-February and March this year, outpacing even TikTok and Facebook-owned (FB) Instagram, Wall Street firm Piper Sandler said in its semi-annual "Taking Stock with Teens" survey.
At the same time, however, investors were set to be especially attuned to any signals from Snap's report that the momentum might be slowing down heading into the second quarter and second half of this year, once more social distancing restrictions get rolled back and users begin to go out more frequently. Netflix's (NFLX) first-quarter results from earlier this week served as one example of a media company already experiencing payback after a 2020 boost, with net subscriber additions sharply missing expectations.
"The month of April should be peak growth for the Online media sector, and the key question for the group is if positive estimate revisions outweigh any potential sector multiple compression," Justin Post, Bank of America research analyst, wrote in a note published April 19.
However, he added, "We continue to be constructive on Snap's innovative products, management execution and ad checks that suggest platform adoption, and think it is positive for Snap to be reporting first in sector, before peers highlight tougher 2nd half comps."
Still, Snap also has a "reopening trade" angle to its business, given that its advertising sales are expected to pick back up in tandem with economic growth, as customers become more apt to spend on marketing.
Shares of Snap have risen 14% for the year-to-date through Wednesday's close, outperforming against the S&P 500's 10.4% gain over the same period.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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