Snap Posts First Quarterly Profit, Shares Soar
Snap Inc (NYSE: SNAP), the owner of the Snapchat app, is having a jolly day on the stock markets. The company posted its first-ever quarterly net profit, and investors have rewarded it with increased demand for the stock, driving it up. Snap stock surged almost 60% during extended trading on Thursday.
- Snap released its financial results for the fourth and final quarter of 2021 this Thursday. The company reported a net income of $23mn on $1.3bn in revenue in Q4 2021. In comparison, it reported a net loss of $113mn on $911mn in revenue in Q4 2020.
- For the full year 2021, Snap brought in $4.1bn in revenue, up 64% from 2020. Net loss nearly halved from $945mn in 2020 to $488mn in 2021.
- Snap ended Q4 2021 with 319 million daily active users, up 20% year-over-year. Notably, year-over-year growth in daily active users has been 20% or more for five consecutive quarters.
Investors piled onto Snap after posting stellar results, including its first profitable quarter. Shares were up $14.30, or 58%, to $38.89 during extended trading on Thursday.
On the same Thursday, before Snap dropped its financial results, its stock slipped 24%. The significant slip came after social media giant Meta (formerly Facebook) posted weaker-than-expected Q4 results. Meta’s stock (NASDAQ: FB) dropped over 20% in one day and took fellow social media stocks like Snap down with it. Fortunately, Snap’s financial results saved it from the turbulence.
On Thursday, Meta shed over $230bn in market capitalization, marking the highest one-day drop ever recorded on the stock markets. In comparison, what Meta lost in market value is greater than the summed market values of Twitter, Snap, and Pinterest multiplied by 2. The Zuckerberg-led company said an Apple iOS privacy change would cost it “on the order of$10bn” in revenue in 2022.
- For Q1 2022, Snap expects to bring in revenue between $1.03bn and $1.08bn.