Shares of Snap Inc. (SNAP) are dropping over 30% in extended hours trading on Tuesday afternoon after the company released its fourth-quarter earnings report. The report showed revenue rose 5% to $1.36 billion, but still missed estimates of $1.38 billion. In addition, Snap posted an adjusted first-quarter EBITDA (earnings before interest, taxes, depreciation, and amortization) which also missed analysts’ expectations.
Scott Kessler, Third Bridge Global Sector Lead, TMT (Technology, Media & Telecommunications), joins Yahoo Finance to discuss Snap’s performance and what he would like to see from Snap going forward.
When asked about how Snap stands out from competition, Kessler replies: “What I would say about that really is one thing and one thing only and that is historically this company more than any other has focused on brand advertising versus performance advertising. It’s one of the reasons why they really had some issues early on post-Covid, if you will, because there was this dramatic shift to direct response advertising essentially associated with e-commerce. That’s not how Snap was built.”
He continues on to say “It’s not how it was operating and they’ve spent essentially the last year rebuilding the advertising technology and solutions to enable them to more effectively sell that kind of performance, e-commerce advertising. But because of that historic orientation, it’s really put them on the defensive and they’ve spent a lot of time and a lot of money essentially reengineering the platform for those capabilities.”
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Editor’s note: This article was written by Nicholas Jacobino
