Snap stock tanks 30% on Q4 earnings

Snap Inc (NYSE: SNAP) is crashing in extended hours on Tuesday after reporting disappointing revenue for its fiscal fourth quarter related partially to the ongoing Israel-Hamas war.

Snap stock up on solid guidance

The stock is being punished also because its management issued muted guidance for the future. Snap now expects revenue to fall between $1.095 billion and $1.135 billion in its current financial quarter.

Analysts, in comparison, were at $1.117 billion. Evan Spiegel – the chief executive of Snap Inc said in a press release today:

Earlier this week, the social media giant announced plans of lowering its headcount by about 10% as Invezz reported here. Snap stock is up nearly 15% versus its year-to-date low at writing.

Notable figures in Snap Q4 earnings release

• Lost $248.2 million versus the year-ago $288.5 million
• Per-share loss also narrowed from 18 cents to 15 cents
• Adjusted EPS printed at 8 cents as per the earnings report
• Revenue jumped 5.0% year-over-year to $1.36 billion
• Consensus was 6 cents a share on $1.38 billion in revenue
• Ended the quarter with 414 million DAUs – better than expected

The New York listed firm added 2.0 million new subscribers to Snapchat+ in Q4. The premium service now has 7.0 million subscribers in total. CEO Spiegel also said on Tuesday:

What else was noteworthy in the earnings report?

Snap Inc generated $3.29 in average revenue per user in its fourth quarter - also shy of estimates.

The social media giant expects a continued increase in daily active users to 420 million in its current quarter versus 419.3 million expected. Its letter to shareholders reads:

Snap, however, forecasts EBIT loss on an adjusted basis of up to $95 million in Q1 - well above $21.9 million that analysts had forecast. Wall Street currently has a consensus "hold" rating on Snap stock.