Snap Inc Q2 2023 Earnings: Will declining revenue affect Snapchat share price?

Last updated:
Snap Inc Q2 2023 Earnings

Snap Inc stock was 3.73 % lower on Thursday, 27th July 2023 at $10.33 per share after the company reported results for the quarter ending June 2023. The share price fell as it saw a double-digit decline in earnings and the company forecast weaker-than-expected earnings for the upcoming quarter ending September 2023. 

Snap Inc: Historical Share Price Performance

1 month6 months1-year5-years

Snap Inc: Users

Average Daily Active Users (DAUs) were 397 million in Q2 2023, an increase of 50 million, or 14% year-over-year. 

 Q2 2022Q2 2023YoY % change
DAUs347 million397 million14.41%

DAUs increased sequentially and year-over-year in North America, Europe, and the Rest of the World. This showcases significant opportunities to expand the Snapchat community globally. 

 Q2 2022Q2 2023YoY % change
North America99 million DAU101 million DAU2.0%
Europe86 million DAU94 million DAU9%
Rest of the World162 million DAU202 million DAU25%
Global347 million DAU397 million DAU14%

Snap Inc: Total Revenue 

Total Revenue has seen a decline of approximately 4% YoY to $1,068 million. The company focused on accelerating and diversifying its revenue growth and because it remains in a period of ‘rapid transition’ to improve its advertising platform, they have limited revenue sources. The company’s Average Revenue per User fell by nearly 16% this quarter to $2.69 which also led to the overall revenue drop.

 Q2 2022Q2 2023YoY % change
Total Revenue$ 1,111 million$ 1,068 million-3.87%
Average Revenue per User$ 3.20$2.69-15.94%

Snap Inc: Net Loss

The company reported a net loss of $377 million, a 10.66% improvement from the prior year i.e.; Q2 2022 results, wherein the company saw a net loss of $422 million. This can be due to the Adjusted EBITDA decline which was - $38 million, compared to $7 million in the prior year. Along with that, the Operating cash flow was - $82 million, compared to - $124 million in the prior year, while the Free Cash Flow was - $119 million, compared to - $147 million in the prior year.

 Q2 2022Q2 2023YoY % change
Net Loss$422 million$377 million10.66%

Snap Inc: Outlook

  • Snapchat expects to hit 1 Billion Monthly Active Users (MAU) in the next 2-3 years. 
  • The Daily Active Users (DAU) will reach 405 million to 406 million in Q3 2023. 
  • Total Revenue is estimated to be between $1,070 to $1,130 million implying negative 5% to flat year-over-year growth

Snap Inc: Analyst View

  • Broker Wells Fargo has an "equal weight" rating for Snapchat. It cut its Share Price Target to $9 from $10.
  • Bernstein has a "market perform" rating for Snapchat. It cut its Share Price Target to $11 from $13. 
  • Jefferies has a "hold" rating for Snapchat. It cut its Share Price Target to $11 from $13.
  • Credit Suisse has an "outperform" rating for Snapchat. It also lowered its Share Price Target to $15 from $16.