Snap up 12% after CEO tells employees of strong 2024 goals

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Co-founder and CEO of Snap Inc. Evan Spiegel holds up a Pixy drone while speaking during the Viva Technology conference dedicated to innovation and startups, at the Porte de Versailles exhibition center in Paris, France June 17, 2022.

Benoit Tessier | Reuters

Snap shares rose nearly 12% on Monday following reports of an internal CEO memo indicating that the social messaging company could post better-than-expected results for 2024.

Evan Spiegel, the company’s co-founder and CEO, told employees in a memo sent in September that it could log more than 475 million daily active users in 2024, beating analysts’ projections of 448 million, the Verge reported Friday.

The memo also said that its full-year advertising revenue growth could be more than 20% for 2024, which Bernstein analyst Mark Schilsky noted in his Tech Specialists newsletter is better than consensus expectations of a little over 14%.

The memo also set a goal of 2023 adjusted EBITDA of $500 million, which Bernstein added would be a “sizeable beat” compared with current analyst projections of $250 million.  

Snap confirmed the numbers cited in the memo with CNBC but characterized them as “stretch, internal goals only.”

Schilsky urged the company to avoid revealing such goals in employee memos.

“Stop doing this! For the love of your shareholders stop putting out aspirational goals like this,” Schilsky wrote. “I know this was an internal memo, but management must have known it was going to leak.”

The company has had a difficult year. Like other social media firms including Meta and Pinterest, Snap has had a challenging time improving its online advertising system in the aftermath of Apple’s 2021 iOS privacy update, which made it less effective at tracking users for targeting ads.

Additionally, Snap has had a harder time operating amid a difficult digital advertising economy, marred by the Russia-Ukraine war and companies pulling back on marketing amid economic uncertainty.

Snap shares sank more than 17% in July after it gave guidance for its current quarter that missed analysts’ expectations.

“The stock is near the lows, expectations are incredibly low (although perhaps that changed after this leak), and the digital ad market is generally doing quite well,” Schilsky wrote. “As long as SNAP doesn’t completely whiff the quarter, like it has for the past five, the stock could jump (squeeze?) materially higher on the next print.”

Snap will report its third-quarter earnings Oct. 24.

Correction: An earlier version of this story misstated the nature of the numbers cited in the memo — they were goals, not projections.

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