Snap SNAP reported first-quarter 2025 earnings of 4 cents per share, in line with the Zacks Consensus Estimate. The figure increased 33.33% from the year-ago quarter. Revenues rose 14.1% year over year to $1.36 billion and beat the Zacks Consensus Estimate by 1.15%.
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Geographically, revenues from North America (61% of total revenues) rose 11.9% year over year to $831.7 million. Revenues from Europe (16.4% of revenues) jumped 14.4% to $224.02 million. Revenues from Rest of the World (ROW) were $307.5 million, up 20.2% year over year.
The average revenue per user (ARPU) increased 4.6% year over year to $2.96. On a year-over-year basis, the ARPU of North America, Europe and ROW climbed 13%, 10.8% and 3.5%, respectively.
Snap Inc. Price, Consensus and EPS Surprise
Snap Inc. price-consensus-eps-surprise-chart | Snap Inc. Quote
Snap’s global community reached 460 million daily active users (DAU) in the first quarter, up 9% year over year. Snap added 7 million DAU on a quarter-over-quarter basis.
North America’s DAU was 99 million, which decreased 1% year over year. Europe’s DAU was 99 million, up 3.1% year over year. ROW’s DAU was 262 million at the end of the reported quarter, which jumped 15.9% year over year. Snap reached more than 900 million monthly active users in the first quarter.
In the first quarter, the number of advertisers with strong signal setups increased 29% for large advertisers and 48% for mid-sized advertisers, laying the groundwork for improved performance. In addition, the number of advertisers that have adopted Conversions API (CAPI) continued to grow, with more than 60% of all DR ad revenues having now completed CAPI integrations.
Adjusted cost of revenues increased 11.7% year over year to $636.6 million. In the first quarter, adjusted operating expenses were $618.2 million, up 6.7% year over year. Sales and marketing expenses decreased 1.3% year over year to $195.8 million, while general and administrative expenses jumped 8.2% year over year to $190 million. Research and development expenses rose 13.2% year over year to $232.4 million.
Adjusted EBITDA was $108.4 million, up 137.5% from the year-ago quarter, reflecting higher revenues and operating expense discipline.
As of March 31, 2025, cash and cash equivalents and marketable securities were $3.2 billion compared with $3.37 billion as of Dec. 31, 2024.Operating cash flow was $152 million compared with $88 million in the prior year.
Free cash flow was $114 million compared with $38 million reported in the year-ago quarter.
For second-quarter 2025, Snap expects infrastructure costs per DAU per quarter between 82 cents and 87 cents. Adjusted operating expenses are expected to be between $2.65 billion and $2.7 billion.
SNAP currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector are Chegg CHGG, ACI Worldwide ACIW and Aviat Networks AVNW, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Chegg have lost 58.1% year to date. CHGG is set to report first-quarter 2025 results on May 12.Shares of ACIW have risen 3.1% year to date. It is slated to report first-quarter 2025 results on May 8.
Shares of AVNW have gained 0.1% year to date. It is set to report third-quarter fiscal 2025 results on May 6.
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Snap Inc. (SNAP) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
