Shares of Snap Inc. (NYSE: SNAP) were up over 2% on Monday. The stock has dropped 19% in the past three months. The technology company is set to report its first quarter 2025 earnings results on Tuesday, April 29, after market close. Here are a few points to note on the upcoming earnings report:
Revenue
Snap has guided for revenues of $1.32-1.36 billion for the first quarter of 2025. Analysts are projecting revenue of $1.35 billion, which represents a growth of over 12% from the same quarter a year ago. In the fourth quarter of 2024, revenues increased 14% year-over-year to $1.56 billion.
Earnings
The consensus estimate for earnings per share in Q1 2025 is $0.04, which compares to adjusted EPS of $0.03 reported in the prior-year period. In Q4 2024, adjusted EPS doubled YoY to $0.16.
Points to note
Snap can be expected to benefit from growth in its user base and rising engagement levels. The Snapchat-owner has forecast daily active users (DAU) to reach approx. 459 million in Q1 2025, which indicates a growth of 9% YoY. In Q4, DAU rose 9% YoY to 453 million.
SNAP’s engagement trends remain encouraging, with growth in global time spent watching content, driven mainly by Spotlight. Last quarter, more than 1 billion Snaps were shared publicly on Snapchat every month, and the company saw a YoY increase of over 40% in the number of creators posting content on Snapchat.
Snap’s advertising business remains strong. In Q4, advertising revenue grew 10% YoY to $1.41 billion, driven mainly by a 14% growth in direct-response advertising revenue. This momentum can be expected to continue in the first quarter. The company is also expected to benefit from its new ad placements Sponsored Snaps and Promoted Places which help advertisers expand their reach in unique ways.
Meanwhile, Snap anticipates an increase in costs in the first quarter. The company has forecast adjusted operating expenses to grow 11-12% YoY in Q1 2025, driven by growth in headcount, higher legal-related costs, and a seasonal shift in marketing expenses.