• The Seville Reporters

Did You Know? SnapChat Shares Tumble



SnapChat reported 3rd quarter earnings on November 7, 2017. Wall Street wasn't impressed and the stock tumbled in after hours trading.

Highlights

1. Daily Active Users (DAU) grew from 153 million in Q3 2016 to 178 million in Q3 2017, an increase of 25.2 million or 17% year-over-year.

2. Average revenue per user (ARPU) was $1.17 in Q3 2017, an increase of 39% over Q3 2016 when ARPU was $0.84.

3. Hosting costs per DAU – Hosting costs per DAU were $0.68 in Q3 2017, as compared to $0.64 in Q3 2016 and $0.61 in Q2 2017.

4. Excess inventory and related charges – In Q3 2017, we recorded $39.9 million of charges related to Spectacles inventory, primarily related to excess inventory reserves and inventory purchase commitment cancellation charges.

You can read SnapChat's quarterly report here


Lowlights

1. Analyst expected DAUs to reach 181 million for the quarter.

2. SnapChat lost $443 million during Q3 2017, 3 times more than the company lost in Q3 2016.

3. SnapChat's reported a loss of $0.14 per share. Analyst were expecting a loss of $0.15 per share.

Other

1. Snap blamed its revenue miss on shifting from direct sales to an auction-based bidding system for selling advertisers.

2. Chief Executive Evan Spiegel said the company is launching a redesign of SnapChat after hearing for years that Snapchat was difficult to understand or hard to use.

The Past

1. In October Credit Suisse put a $20 price target on SnapChat. You can read more about that here.

If you're a believer in SnapChat, then the recent fall presents a buying opportunity. The Seville Report will watch SnapChat from the sidelines.

We hope this adds value to your investing.

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Happy Investing

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