Snap Continues to Die

By Douglas A. McIntyre Updated Jan 11, 3:49PM EST · Published Oct 26, 6:20AM EDT

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Snap Continues to Die — © pichitstocker / iStock

Snap Inc. (NYSE: SNAP) posted a 43% increase in revenue in the third quarter to $297 million. All the other financial data from the company was ugly. Based on most metrics, Snap continues to die and management has no way to stop that. The anxiety around its fortunes has driven its share price to an all-time low.

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Snap’s net loss of $325 million compares to a loss of $443 million in the year-ago quarter. It could perversely be called an improvement. Just as bad, daily active users were up only 1% from the previous quarter to 186 million. By this most important metric to measure social media companies, Snap is a failure.

On the news, Snap’s shares reached $6.12, down from a 52-week high of $21.22. Over the past two years, the stock has lost 74% of its value.

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Additionally, Snap management announced low expectations for the upcoming periods:

Revenue is expected to reach a new high of between $355 million and $380 million, or grow between 24% and 33% compared to Q4 2017. Adjusted EBITDA is expected to be between $(100) million and $(75) million, compared to $(159) million in Q4 2017.

Adjusted EBITDA is the way Snap wants investors to view its profits. Even based on this measure, Snap’s troubles continue.

Speaking about the results, Tim Stone, Snap’s chief financial officer, said:

We’re investing in long-term growth opportunities and driving operational efficiencies. We achieved record revenue and strong bottom-line results this quarter and expect a record fourth quarter, as we continue to invest in innovation for our community and scale our business.

They are records Snap should not be proud of.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.