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Shares of Snap Inc. (NYSE: SNAP ) rose slightly on Monday. The stock has gained 22% annually. The social media company will report its fourth quarter 2022 results on Tuesday, January 31, after the market closes. Here’s a look at what to expect:
results
Analysts project revenue of $1.3 billion for Snap in Q4 2022 which is relatively in line with the amount reported by the company for the fourth quarter of 2021. In the third quarter of 2022, revenue was $1.13 billion, up 6% year-on-year. . At the time of its Q3 earnings report, Snap mentioned that year-over-year revenue growth is likely to accelerate moving through Q4 and due to a decline in ad revenue, the company expects revenue growth to remain flat YoY in the fourth quarter.
fortunate
Analysts expect EPS of $0.11 for the fourth quarter of 2022, which compares to adjusted EPS of $0.22 reported by the company in the same period a year ago. Adjusted EPS is $0.08 in the third quarter of 2022.
user growth
In its Q3 earnings report, Snap said that its daily active users (DAU) will reach about 375 million in the fourth quarter of 2022. This would represent a 17.5% growth from last year’s quarter. In Q3, DAU grew 19% YoY to reach 363 million.
Points to note
During the third quarter, revenue growth continued to decline due to the impact of a challenging macroeconomic environment, platform policy changes and increased competition. The decline in brand-oriented advertising spending affected the company’s results during the third quarter and this trend will also continue into the fourth quarter.
Snap continues to grow its community and during the third quarter, DAU has grown across all regions. The company is rolling out new features to increase engagement on the platform. Discover and Spotlight continue to be popular among users with the company seeing a 55% growth in total time spent watching Spotlight content during Q3.
Another area of growth for Snap is augmented reality. The company continues to invest in Spectacles, augmented reality glasses, as well as Lens Studio, Lens Engine and Lens Cloud, all of which are key to giving the company a competitive edge in the coming years.
Snap continues to face stiff competition from other social media companies in terms of user engagement as well as digital advertising. Since most of the revenue comes from advertising, the advertising spending environment and its impact on the company’s results are important points to watch.
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