Snap’s First-Ever Earnings: How Will It Stack Up Against Facebook and Twitter

Image via Anthony Quintano/Flickr CC

Snap Inc, is set to release its first earnings report on May 10th, and it will likely set the tone for Snap’s (SNAP)SNAP financial future. To help investors get a better understanding of how Snap is set to grow, we’ve compiled revenue, net income, user base, and stock price metrics for two companies in the same industry: Facebook and Twitter.

Revenue, net income, and active daily users were taken for each quarter from Facebook’s (FB)FB and Twitter’s (TWTR)TWTR quarterly earnings report. Common stock prices recorded were taken one day before quarterly earnings reports were released at close to best reflect the last point when stock price would not be affected by an earnings release.

In their first quarters, Facebook and Twitter both experienced growth in revenues and daily active users, and declines in net income. Facebook saw a 32% increase in revenue and daily active users, sitting at a stock price of $29.24, while Twitter more than doubled its revenue and great is daily active user base by 30% (Table 1).

Compared to the year prior to their respective IPOs, Facebook and Twitter both reported big losses (Table 2). Investors can expect Snap to return similar results, including increased income and decreased net income, but the looming question is how Snapchat’s daily active users will look.

Since Facebook’s and Twitter’s first quarter earnings reports, the social platforms have moved in different directions. Facebook’s revenue has shown growth quarter over quarter (aside from the first quarter slump) as well as steady growth in daily active users (Chart 1 & 2). Twitter’s revenue has also shown growth, but is also plagued with significant losses in net income and stagnating daily active user growth (Chart 3 & 4). Finally, Facebook’s stock price has been soaring, while Twitter’s plummeted a year and a half after its IPO.

From the beginning, Snap was not as financially equipped as Facebook or Twitter, reporting lower revenue, higher losses, and less than 150 million daily active users the year before its IPO. Even more, the launch of Instagram Stories and the migration of Snapchat users and social media influencers to Instagram took a major toll on Snap’s platform and user growth.

Nonetheless, on its first trading day, Snap’s shares soared over 50% of its original value, creating a frenzied hype among investors, reminiscent of the rush to buy Twitter. However, unlike Twitter, Snap still had potential revenue generating products in store, such as incoming original programming, Snapchat Spectacles, and new advertising options. Its first quarter earnings report will provide the critical information investors need to make further informed decisions about Snap, a budding “camera company.”