Miserly Growth Not Helping Q2 2017 Numbers for Snap

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How Will Investors Take 4% Quarterly Growth?


Poor Q2 2017 Numbers for Snap

I’d still like to know which idiots were religiously buying the Snap stock at $13.50 yesterday, i.e. before the Q2 2017 earnings release.

Quarterly growth was a miserly 4%. The stock must surely take a fall on the open (2.30pm UK time).

Revenues are up but losses remain stubborn and I had not expected losses of $443m.

I have no issue with stock-based compensation, you want to motivate your work-force.

At the same time though, $245m of the $443m losses were due to stock-based compensation .That follows nearly $1992m! in stock-based compensation losses in Q1.

If we keep seeing such high levels of losses due to stock-based compensation, because that’s how you pay employees, then it’s difficult to see how revenues will surpass costs.

This company is burning through cash.

Will this company ever be profitable?

Will this unicorn have time to become profitable?


Snap Inc Q2 2017 Highlights

  • arrow_forwardDaily Active Users (DAU), i.e. main KPI for growth, only grew 4% quarter on quarter. DAU numbers were up to 173m in Q2 from 166m in Q1
  • arrow_forwardRevenues up to $181.7m in Q2 from $149.6m in Q1
  • arrow_forwardLosses after stock-based compensation fell to $198m in Q2 from $217m in Q1
  • arrow_forwardLosses just due to stock-based compensation fell to $245m in Q2 from $2,237m in Q1
  • arrow_forwardLosses including stock-based compensation fell to $443m in Q2 from $1,992m in Q1
  • arrow_forwardAverage revenue per DAU only back to Q4 2016 levels at $1.05
  • arrow_forwardAverage hosting costs (and ignoring all other costs for a second) = $0.61 per DAU = steady-ish cost per DAU but a large chunk of revenue per DAU
You can read the official Snap Q2 2017 numbers here.


Snap Q2 2017

  • arrow_forwardLosses
    • infoQ1 2016 = $105m
    • infoQ2 2016 = $116m
    • infoQ1 2017 = $217m (or $2209m with stock-based compensation losses)
    • infoQ2 2017 = $198m (or $443m with stock-based compensation losses)

  • arrow_forwardRevenues
    • infoQ1 2016 = $38.8m
    • infoQ2 2016 = $71.8m
    • infoQ1 2017 = $149.6m
    • infoQ2 2017 = $181.7m

  • arrow_forwardDaily Active Users (DAU)
    • infoQ1 2016 DAU = 122m
    • infoQ2 2016 DAU = 143m
    • infoQ4 2016 DAU = 158m
    • infoQ1 2017 DAU = 166m
    • infoQ2 2017 DAU = 173m

  • arrow_forwardAverage Revenue per User (ARPU)
    • infoQ1 2016 ARPU = $0.32
    • infoQ2 2016 ARPU = $0.50
    • infoQ4 2016 ARPU = $1.05
    • infoQ1 2017 ARPU = $0.90
    • infoQ2 2017 ARPU = $1.05

  • arrow_forwardHosting Costs per DAU
    • infoQ1 2016 = $0.52
    • infoQ2 2016 = $0.55
    • infoQ4 2016 = $0.72
    • infoQ1 2017 = $0.60
    • infoQ2 2017 = $.61

More on Snap Inc



AuthorAlex Turner

Senior Editor, SpreadBetMagazine

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