Snap to Report Q1 Earnings: Key Metrics and Expectations to Watch

Snap SNAP is scheduled to report its first-quarter 2025 results on April 29.

See the Zacks Earnings Calendar to stay ahead of market-making news.

For the first quarter, Snap expects total revenues between $1.33 billion and $1.36 billion. SNAP’s adjusted EBITDA is expected to be between $40 million and $75 million.

The Zacks Consensus Estimate for revenues is currently pegged at $1.35 billion, indicating a 12.73% increase from the year-ago quarter’s reported figure.

The consensus mark for earnings has remained unchanged at 4 cents per share in the past 90 days, implying a 33.33% increase from the year-ago quarter’s 3 cents.

SNAP surpassed the Zacks Consensus Estimate for earnings in three of the trailing four quarters, and matched once, with an average positive surprise of 58.57%.

Let us see how things are shaping up for the upcoming announcement.

Snap Inc. Price and EPS Surprise

Snap Inc. price-eps-surprise | Snap Inc. Quote

Factors to Consider

Snap is expected to have benefited from continued momentum in its direct response (DR) advertising business during the first quarter of 2025. DR revenues had strong growth in the fourth quarter, particularly from app-based purchase optimizations and 7-0 optimization, which are expected to have continued performing well in verticals like retail, gaming, and financial services during the quarter under review.

Snapchat+ subscriptions are likely to have contributed significantly to the top line in the first quarter. Subscriber count doubled year over year to 14 million in the fourth quarter, with more than a $500 million annualized run rate. Continued demand for personalization features and pricing optimization are expected to have supported revenue growth in the first quarter.

Snap began rolling out Sponsored Snaps and Promoted Places to more markets in the first quarter, following early success in the quarter before. These high-reach ad formats are likely to have attracted more advertiser spend, especially from small and medium-sized businesses and location-based campaigns. However, ongoing adjustments related to the Simple Snapchat rollout might have impacted Story ad demand, as Snap works to migrate ad placements from the traditional tile-based Stories page to in-feed and Sponsored Snap units. This shift, along with engagement losses from a cohort of users tied to the older layout, might have temporarily affected upper-funnel performance.

Snap is expected to have seen higher operating costs in the first quarter, as the company guided for 11-12% year-over-year growth in adjusted operating expenses. This increase was driven by planned growth in full-time headcount, moderate wage inflation, higher legal and compliance-related costs, and a seasonal shift of marketing expenses into the quarter under review. These factors might have put pressure on margins during the quarter.

Additionally, Snap is expected to have benefited from infrastructure efficiencies in the first quarter, as management estimated that infrastructure cost per daily active user would be at the low end of their guidance range, helped by recent pricing improvements. These savings might have helped offset higher legal costs and planned growth in full-time headcount.

What Our Model Says for SNAP

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not exactly the case here.

Snap currently has an Earnings ESP of -25.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat earnings in their upcoming releases:

Clarivate CLVT currently has an Earnings ESP of +7.76% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

CLVT shares have lost 31.1% in the year-to-date (YTD) period. It is set to report its first-quarter 2025 results on April 29.

Affirm AFRM currently has an Earnings ESP of +57.14% and sports a Zacks Rank #1.

AFRM shares have declined 20.6% YTD. It is slated to report its third-quarter fiscal 2025 results on May 8.

Airbnb ABNB has an Earnings ESP of +6.00% and a Zacks Rank #3 at present.

ABNB shares have lost 7.4% YTD. Airbnb is scheduled to report its first-quarter 2025 results on May 1.

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This article originally published on Zacks Investment Research (zacks.com).

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