Snap Inc. (SNAP) is scheduled to report results of its second fiscal quarter after market close on July 23, with a conference call scheduled for 5 pm ET. What to watch for:
1. OUTLOOK: During the company's last earnings call, Snap said it saw second quarter revenue between $820M-$840M, with consensus at $845M, and adjusted EBITDA between ($20M) and breakeven. Snap CFO Derek Anderson added that, "As we look forward to Q2, we estimate that DAU will grow at a rate consistent with the prior quarter, or approximately 22% year-over-year, to reach 290M in Q2. On the monetization side, we are cautiously optimistic that the operating environment will continue to improve."
2. POSITIVE CHANNEL CHECKS: On Tuesday, Credit Suisse analyst Stephen Ju raised the firm's price target on Snap to $90 from $80, keeping an Outperform rating on the shares. Ongoing acceleration of reported effective CPM growth in recent quarters while at the same time presenting advertisers with declining cost per action, speaks toward an advancing ability at Snap to use its first party data to improve targeting and serve the right ad to the right user at the right time, the analyst contended. More near-term, Ju increased his revenue growth forecast for the second quarter to +84% year-over-year based on positive channel checks.
3. VERTEBRAE ACQUISITION: Snap has purchased Vertebrae, an AR company that allows a brand to create and manage 3D versions of their goods, The Verge's Alex Heath reported on Monday. Vertebrae, allows a company to "upload visuals and other information" for a product and customers can view the material in a 3-dimensional version and "potentially buy directly, within Snapchat, the author added. "While Snap first used its augmented reality tech for silly effects like puking rainbows and dancing hotdogs, the company increasingly sees AR as a way to shop," the publication noted.
4. UNIVERSAL MUSIC GROUP AGREEMENT: Vivendi's (VIVHY) Universal Music Group and Snap announced an agreement that will allow Snapchat's users to incorporate UMG's catalog of recorded music and content into creative tools, including Sounds and augmented reality Lenses. Under the terms of the innovative multi-year agreement, UMG's entire recorded music catalog is available on a global basis in Snapchat's Sounds tool, including Search and curated Playlists. UMG is additionally developing augmented reality music Lens content featuring the company's artists that will be regularly available in Snap's Lens Carousel and Lens Studio, with the opportunity to feature merchandise launches and e-commerce experiences.
Back in May, Snap had also announced a partnership with Poshmark (POSH) to launch Poshmark Mini, a bite-sized social shopping experience of Poshmark that lives inside of Snapchat. "Community is at the heart of everything we do, and we're focused on building the world's largest and most accessible social shopping community where everyone is welcome and anyone can thrive," said Steven Tristan Young, Chief Marketing Officer of Poshmark. "We're delighted to bring our simple, social and sustainable shopping experience to Snap, a brand that also prioritizes and fosters community. This partnership is a natural extension of our founding mission to put people at the heart of commerce and allows us to create more engaging, dynamic, and personalized shopping experiences everywhere consumers are."
Snap
-0.545 (-0.86%)
Vivendi
+0.5425 (+1.67%)
Poshmark
+1 (+2.39%)