Snap plunges 13% on ‘headwinds’ to start quarter, inability to offer guidance
Snap CEO Evan Spiegel speaks during the Semafor World Economy Summit 2025 at Conrad Washington in Washington, D.C., on April 23, 2025.
Kayla Bartkowski | Getty Images
Snap reported better-than-expected first-quarter revenue Tuesday but declined to provide guidance, citing macroeconomic uncertainties that could weigh on advertising demand.
Shares dropped 13% in after-hours trading.
Here is how the company did compared with Wall Street’s expectations:
- Earnings per share: Loss of 8 cents. That figure is not comparable to analysts’ estimates.
- Revenue: $1.36 billion vs. $1.35 billion expected, according to LSEG
- Global daily active users: 460 million vs. 459 million expected, according to StreetAccount
- Global average revenue per user: $2.96 vs. $2.93 expected, according to StreetAccount
Snap did not offer an outlook for the second quarter, citing uncertainties surrounding “how macro economic conditions may evolve in the months ahead, and how this may impact advertising demand more broadly.”
Analysts had expected $1.39 billion in second-quarter revenue guidance. The company said it expects daily active users to come in near the midpoint of its second-quarter range at 468 million.
“While our topline revenue has continued to grow, we have experienced headwinds to start the current quarter, and we believe it is prudent to continue to balance our level of investment with realized revenue growth,” the company said in a letter to investors.
Like many tech companies, Snap is facing a turbulent macro setup as it grapples with President Donald Trump’s evolving trade plans. Many fear that global trade uncertainty might lead companies to lower guidance or pull back spending this earnings season.
Snap’s cited potential constraints on advertising demand as the reason for holding off on guidance. Ad revenues for the period rose 9% year over year to $1.21 billion. That growth came mainly from direct response advertising. The company also said that brand-oriented advertising revenue dipped 3% from a year ago.
The company isn’t alone. Last Thursday, Alphabet reported first-quarter sales of $90.23 billion, which surpassed Wall Street expectations, but executives told analysts that the company may experience headwinds to its online ad business in the Asia-Pacific region.
Snap lowered its full-year adjusted operating expenses range to between $2.65 billion and $2.70 billion, down from $2.70 billion to $2.75 billion. The company also revised its full-year cost guidance for stock based compensation downward to between $1.13 billion and $1.16 billion from $1.15 billion to $1.20 billion.
Sales in Snap’s first quarter jumped 14% to $1.36 billion from $1.19 billion in the year-ago period. The company reported a net loss of about $140 million, or 8 cents per share. That narrowed 54% from about $305 million, or 19 cents, in the year-ago period. Adjusted EBITDA came in at $108 million, topping a $64 million estimate from StreetAccount.
The company attributed the 8 cents loss to a $70.1 million charge related to cash severance, stock-based compensation expenses and other costs associated with a 2024 restructuring. “These charges are not reflective of underlying trends in our business,” the company said.
Snap posted 460 million daily active users during the period, up from 453 million the previous quarter. The company also said that it reached 900 million monthly active users, up from 850 million in August, the last time Snap provided that stat.
Meta reports its latest earnings on Wednesday, followed by Reddit on Thursday and Pinterest on May 8.
Cheng Xin | Getty Images
Applied Digital shares jumped 16% on Friday after the company posted strong first-quarter revenue that was boosted by artificial intelligence data center demand, putting the stock up more than 350% for the year.
Here’s how the company did compared to LSEG estimates:
- Loss per share: Loss of 7 cents vs. a loss of 13 cents expected
- Revenue: $64.2 million vs. $50 million expected
First quarter revenue of $64.2 million was up 84% from a year ago, when it reported $34.85 million in revenue.
The data center company reported earnings after the bell on Thursday.
During the quarter, Applied Digital built on its $7 billion lease agreement with CoreWeave that was announced in June for another 150 megawatts at the firm’s Polaris Forge 1 campus in North Dakota. The additional capacity brings the anticipated contracted lease revenue for the project up to $11 billion.
“With hyperscalers expected to invest approximately $350 billion into AI deployment this year, we believe we are in a prime position to serve as the modern-day picks and shovels of the intelligence era,” CEO Wes Cummins said in a release.
The new 150 MW building will join two other data cell blocks, each hosting 100 MW and 150 MW. The company noted that one building is nearly complete and construction will begin on the other.
Applied Digital also secured funding from Macquarie Equipment Capital for a second campus in North Dakota, dubbed Polaris Forge 2. The estimated $3 billion factory will hold two 150 MW buildings, bringing the total leased capacity to 600 MW across both campuses.
An initial 200 MW of power is expected to come online in 2026 and reach full capacity in 2027, the company said.
The company had a net loss of $18.5 million in the first quarter, a loss of 7 cents per share. A year ago, the company posted a net loss of $4.29 million, a loss of 3 cents per share.
Analysts polled by LSEG expect a loss of 15 cents per share for the second quarter on revenue of $76 million.
Applied Digital 5-year stock chart.
Cheng Xin | Getty Images
Rocket Lab shares have added more than a quarter in value this week as the aerospace company inked new launch deals in the burgeoning space tech industry.
The stock was flat on Friday, but has surged over 20% this week. Shares were up nearly 50% over the last two weeks and traded near fresh highs on Friday.
The stock has nearly tripled since the start of the year.
On Friday, the company said it secured two launches with the Japan Aerospace Exploration Agency, scheduled for December and in 2026.
Earlier in the week, Rocket Lab announced a multi-launch agreement with Japanese space start Q-shu Pioneers of Space. That’s on top of four contracted missions.
Late last month, the company also secured 10 additional launch missions for Synspective, bringing its total with the Japanese satellite company to 21. The first is scheduled for later this month.
Rocket Lab’s extreme stock movement could also be a result of some short covering, which occurs when short sellers buy a security to close a position and mitigate losses. Short interest accounted for nearly 14% of Rocket Lab’s float at the end of September.
Investors have poured more money into the space sector this year as the government greenlights more contracts and funding.
The space sector, currently dominated by billionaire-backed ventures like Elon Musk‘s SpaceX, has also seen a wave of initial public offerings this year from the likes of Firefly Aerospace, Voyager Technologies and Karman Holdings.
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