=Snap (SNAP) reported earnings on Tue 23 Apr 2019 (a/h)

Snap beats by $0.02, beats on revs, Adj-EBITDA exceeds guidance, DAU above consensus; guides Q2 revs in-line

• Reports Q1 (Mar) loss of $0.10 per share, excluding non-recurring items, $0.02 better than the S&P Capital IQ Consensus of ($0.12); revenues rose 38.9% year/year to $320.43 mln vs the $306.28 mln S&P Capital IQ Consensus. Adj-EBIDA was ($123 mln) vs. guidance of ($165-140 mln)
• DAUs were 190 million in Q1 2019, compared to 186 million in Q4 2018 and 191 million in Q1 2018. (Estimates called for DAU to be roughly 187 mln)
• Co issues in-line guidance for Q2, sees Q2 revs of $335-360 mln vs. $346.83 mln S&P Capital IQ Consensus; sees Adj-EBITDA of ($150-125 mln) vs. estimates of roughly ($112 mln).
• Earnings Slides
• Prepared Remarks
  • Android: As of the end of Q1, our new Android application is available to everyone. Compared to the prior version, it is 25 percent smaller, opens 20 percent faster on average, and is modularized to allow for efficient ongoing innovation. On some of the lowest-performing devices, this resulted in a 6 percent increase in the number of people sending Snaps within the first week of upgrading to the new Android build. While these early results are promising, improvements in performance and new user retention will take time to compound and meaningfully impact our top-line metrics.
  • Our augmented reality platform continues to evolve, with our community now spending more than 250 million minutes playing with AR experiences every day on average in the Snapchat camera. This represents a 10 percent increase in play time per DAU compared to last year.
  • Our advertising business is continuing to scale following our transition to self-serve monetization, with nearly all of our products, including Lenses, now available via our Ads Manager.....This has helped us scale our direct response revenue, which more than doubled when compared to Q1 last year.
  • DAU Commentary: Our results in Q1 benefitted from positive momentum at the beginning of the quarter due to seasonality that we observed as a result of the holiday season.
  • ARPU: Average revenue per user was $1.68, an increase of 39 percent year-over-year and a decrease of 19 percent sequentially, again reflecting seasonality in our business.
  • With respect to the second quarter of 2019, the positive trends we are observing in per-user engagement may increase our infrastructure costs overall. Additionally, as Evan mentioned earlier, we plan to make additional investments in marketing, content, engineering, and sales to support our long term strategic objectives, and to build on the momentum we see in our business today. We believe that these investments will create value over the long term, but in the immediate term they will put downward pressure on the very high operating leverage we have observed in recent quarters.
  • Additional DAU Commentary: While we are not going to give specific guidance on daily active users, we have previously seen stronger daily active user growth rates in Q1 when compared to Q2.