The company stated on Tuesday that fourth-quarter sales amounted to $560.9 million. This was a bit less than the average analyst forecast of $562.9 million. The Snap revenue forecast for the first quarter was also slightly lower than expected.
New users and growing competition
Snap recorded a quarterly and annual net loss, also paying $100 million to settle a public offering case. Prior to the report, the investors were optimistic about the company’s outlook and the share has risen about 16% this year. The share plunged to $17.34, the lowest level since the end of January 2020, when the stock was traded at $19.76 per share. The owner of the Snapchat app last year made a big shift after a much-criticized redesign, a series of executive departures, job cuts, and a rocky IPO in 2017. In Q4, 2019, the company added more users than expected, but this was not enough to make the company generate profit. Snap operates in the competitive digital advertising market, with Google and Facebook Inc getting, for the most part, major sales. It also faces the emergence of new competitors for young social media users, such as TikTok from ByteDance Inc. However, Mr. Spiegel argues that the company still has an opportunity to reach a younger audience and be profitable in the future. Snap expects the first-quarter revenue [2020] to reach $450 million to $470 million. Wall Street analysts projects $463 million.
