Snap is scheduled to report its Q2 results this afternoon, with a conference call scheduled for 5 PM ET.
Current Q2 analyst estimates call for a Non-GAAP EPS loss of $0.10 on revenues of $358 mln (+36.6% yr/yr), and Adj-EBITDA of ($122 mln). In April, the company provided guidance for revenues of $335-360 mln and Adj-EBITDA of ($150-125 mln). DAU estimates for Q2 are 192 mln (+2% yr/yr, +1.1% qtr/qtr).
Snap currently has a market cap of $19 bln and trades at a P/S of 11x. Short interest is 10%.
Based on the weekly Jul26 14.5 straddle, the options market is pricing in a move of approximately 14% in either direction by weekly expiration (Friday).
Snap beats by $0.04, beats on revs, beats on DAUs, beats on Adj-EBITDA; guides Q3 revs, Adj-EBITDA above consensus; calls for Q3 DAUs of 205-207 mln (14.83 +0.68)
Reports Q2 (Jun) loss of $0.06 per share, excluding non-recurring items, $0.04 better than the S&P Capital IQ Consensus of ($0.10); revenues rose 48.0% year/year to $388.02 mln vs the $358.16 mln S&P Capital IQ Consensus; Adj-EBITDA was ($78.7 mln) vs. guidance for ($150-125 mln)
DAUs were 203 million in Q2 2019 (vs. estimates for 192 mln), compared to 190 million in Q1 2019 and 188 million in Q2 2018.
Co issues upside guidance for Q3, sees Q3 revs of $410-435 mln vs. $400.23 mln S&P Capital IQ Consensus; sees Adj-EBITDA of ($85-60 mln) vs. ($96 mln) estimate.
We added 13 million daily active users, our highest net adds since the second quarter of 2016, bringing our daily active users to 203 million. The average number of Snaps created every day grew to more than 3.5 billion this quarter and average time spent per user was over 30 minutes per day. Our revenue growth rate accelerated both quarter-over-quarter and year-over-year to 48 percent, yielding $388 million in total revenue for the quarter.
We are seeing early positive results following the rollout of our new Android application, with more than a 10 percent increase in the retention rate of people who open Snapchat for the first time. Furthermore, on the majority of Android devices used by new users, Snapchatters are now sending 7 percent more Snaps when compared to the old version, which we believe is an important leading indicator of their long-term retention.
As a result of our investments in our content platform, total daily time spent by Snapchatters watching Discover increased by over 60 percent year-over-year, while the number of daily viewers has grown by 35 percent year-over-year.
Our accelerating top-line growth in daily active users, engagement, and revenue is translating into significant improvements in our financial performance. Our total cost structure per daily active user grew less than 1 percent year-over-year, meaning that nearly all of our revenue growth flowed through to the bottom line and resulted in a 53 percent year-over-year improvement in adjusted EBITDA. As we approach our stretch goal of adjusted EBITDA breakeven, we are excited about dedicating more resources toward investing in innovation while maintaining a high degree of operational rigor.
Average revenue per user was $1.91 in Q2, an increase of 37 percent year-over-year and 14 percent sequentially
We estimate that approximately 7 to 9 million of the 13 million in sequential DAU growth is attributable to an improvement in user engagement that we observed after launching our new augmented reality Lenses, which brought in new users and re-engaged lapsed users. We estimate that the remaining 4 to 6 million of sequential growth in DAU was driven by underlying growth trends in our community, which are the result of the improvements we have made to our application over the past year. Importantly, the impact of our augmented reality innovation was higher because of these improvements, including the rebuild of Android, as these improvements have better positioned us to capture the upside of our innovation.
Q3 has historically been a relatively difficult quarter for us seasonality wise and this will be a headwind in Q3 relative to Q2. We expect that the underlying growth we've experienced year to date will continue in Q3, and therefore offset these seasonal headwinds. As a result, our financial guidance assumes DAU of 205 to 207 million in Q3, representing 10 to 11 percent year-over-year growth, which would be a sequential acceleration from 8 percent in Q2. We are cautiously optimistic that the underlying growth trend in user engagement will continue into Q4 and next year.
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