Snap shares were propelled higher Friday after the social media site turned in first-quarter financial results that surpassed Wall Street’s targets and set its sight on a jump in revenue.
The company late Thursday posted breakeven earnings per share on an adjusted basis compared with a loss of $0.06 per share in a consensus estimate from Refinitiv. A year ago, Snap lost $0.08 per share.
Revenue leapt by 66% to $769.6 million from $462.5 million a year earlier, beating analyst expectations of $743.8 million. The company said its active advertiser base about doubled from the year-ago period and that it delivered positive free cash flow for the first time as a public company.
Shares rose 6.6% to $60.80 early Friday. The stock has picked up about 14% this year and has more than tripled from $16 over the past 12 months.
Snap forecast second-quarter revenue of $820 million to $840 million, which would represent growth of 81% to 85% from $454 million in the year-ago period. Analysts, on average, currently anticipate $827 million.
In the first quarter, global daily active users rose by 51% to 280 million, higher than the Refinitiv estimate of 274.6 million users. Snap also said for the first time that the majority of its daily active users for the quarter were on the Android version of its app.
“We have a large opportunity to gain share of the global digital ad market, which is $340 billion and growing,” said Jeremi Gorman, Snap’s chief business officer, during the company’s earnings call. She said the company is focused on three priorities: investing in its ad platform, scaling its sales and marketing functions to support advertising partners worldwide, and building ad experiences through video and augmented reality.
Social platforms, especially over the past year, have been increasing focus on e-commerce, said Scott Kessler, global sector lead for technology, media and telecommunications at Third Bridge, in a note.
“The recent acquisition of Fit Analytics could help Snap in the fashion area, and ultimately challenge Pinterest, where the latter has had success with its “try on” feature in the beauty category,” he said.
The app aims to create unbiased news in real-time and bills itself as “TikTok for news.”
It creates news stories, averaging at around 70 words, which users can read in less than nine seconds. The stories are listed in-app in a swipe format that’s easy on the eye. This is crucial to make the app attractive to its millennial target market, Vazirani said.
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People in their teens and 20s often check their phones before they even get out of bed, logging into various apps to view the latest newsfeed updates. On Volv, users can scroll through and see all the major news stories at a glance.
In this way, the app can show people the top political and financial stories and covert non-news readers, while also offsetting heavy stories with lighter reads.
This approach is paying off. Volv publishes around 50 stories a day and its articles have been read nearly 8 million times so far. Its founders said it has a high retention rate, too.
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Volv launched a week before the US went into lockdown but perhaps this was fortunate timing. People staying at home spend more time online. In addition, major news events have drawn readers in. This includes the Black Lives Matter movement, tumultuous 2020 presidential election, Capitol siege, and of course, the ongoing pandemic.
“It sort of pushed us in at the deep end,” Almeida told Insider.
Being unbiased is a key part of the app’s identity. Its founders also recently launched a feature called timeline news. This allows readers to get a broader view of the topic and understand how a story has developed, without moving away from the short-format feature.
It has a team of fewer than 10 people – but it’s actively recruiting more so it can diversify its content.
Prior to launching the app, Almeida and Vazirani, emailed billionaire entrepreneur Mark Cuban on a whim for some advice. To their surprise, Cuban responded. He gave them tips on how to make the content more youthful and in sync with millennials. He also advised them on how to market the app and differentiate it from existing news sites.
Almeida and Vazirani had no tech experience before creating Volv. Instead, they created the app from a consumer angle, the pair told Insider. They also applied this to the interface of the app, which has neutral colors and no bold headlines to create a calm, seamless experience, Vazirani said.
So far, Volv has used purely organic marketing. It’s been featured by YouTubers and tech bloggers, and has a page on Product Hunt, which helps spread the word and give it a global audience, Almeida said. Although it’s shunned paid marketing so far, it’s looking to try it out in the future, she added.
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Volv received pre-seed funding through Snap’s accelerator Yellow, which Vazirani said gave it “instant validation.” As well as the funding, Yellow has also given Volv access to a range of resources, including sessions hosted by guest speakers. Snapchat and Volv share the same target market and are both based around speed and short pieces, so the pairing made sense, Vazirani said.
The founders told Insider Volv is going to be raising its seed round soon but did not provide further details.
The roughly 10,000-square-foot home lies within a gated community in the mountains between Beverly Hills and Studio City and was previously owned by Jennifer Messer, the daughter of Skechers founder Robert Greenberg, Dirt reports.
Reports of Grusd’s purchase follows another multimillion-dollar home purchase by a Snap executive: Dirt’s Mae Hamilton reported last month that Jeremi Gorman, Snap’s chief business officer, paid $15.8 million for a mansion in Hermosa Beach, California, just south of Snap’s headquarters in Venice, California. The hilltop home boasts ocean views and backs up to a property owned by TV host Jimmy Kimmel, Yahoo reports.
And in January, The New York Post’s Mary K. Jacob revealed that Snap cofounder and CEO Evan Spiegel dropped $30 million on a mansion in Paris. The 10,000-square-foot house, located near the Seine river in Paris, includes six bedrooms, five bathrooms, a swimming pool, courtyard, garden, library, music room, wine cellar, private dressing rooms, and space for nurses, maids, or chefs, according to the Post.
Spiegel and Kerr reportedly paid $30,358,000 when they purchased the property last May.
Those three major home purchases follow a breakout year for Snap in which shares of the company’s stock have risen roughly 34%. Snap’s stock recently hit a 52-week high of $68.70 following its investor day – Peter Sellis, Snap’s senior director of ad products, said that the company is “in a position to drive multiple years of 50% plus revenue growth,” according to CNBC.
As Insider’s Tanya Dua, Lara O’Reilly, and Dan Whateley reported earlier this month, Snap has been steadily winning back users and advertisers, due in part to the Facebook ad boycott last summer. Gorman told Insider that it was a “tipping point” for Snapchat, the disappearing photo and video app Snap owns – the company was able to convince both new and existing advertisers to spend on Snapchat instead of other social media platforms.
President Joe Biden signed a $1.9 trillion stimulus law last week, among the largest government rescue measures in American history.
Many of its provisions are directed at keeping individuals and families afloat as vaccinations become more widely available. Still, some aspects of the law may end up dramatically remaking the social safety net.
“This package sets a new and powerful precedent, especially for helping children and their families when they have limited or no income,” Indivar Dutta-Gupta, co-executive director of the Georgetown Center on Poverty and Inequality, said in a recent interview with Insider.
(1) $1,400 stimulus checks
The relief law includes a $1,400 direct payment for most taxpayers. Those will be distributed over the next few weeks, and some are already going out the door.
Individuals earning up to $75,000 and couples making up to $150,000 qualify for full checks. A married couple, then, can get $2,800. People can also collect an extra $1,400 per adult dependent, a change from the first two federal payouts.
People earning above those thresholds still qualify for a smaller direct payment. But eligibility is capped at individuals earning more than $80,000 and joint filers bringing in more than $160,000, meaning people and households making above those amounts are paid nothing.
(2) $300 federal unemployment benefits through Labor Day
The law provides $300 in weekly federal unemployment benefits until September 6. The measure renewed the government supplement to state unemployment checks for an extra six months.
It extends the length of various programs, such as the Pandemic Unemployment Assistance program for gig workers and the Pandemic Emergency Unemployment Compensation for long-term unemployed people. Both will expire in September without additional action in Congress.
(3) Expanded tax credits
The law also beefs up the child tax credit for millions of families. For the next year, it provides $3,600 per child aged 5 and under, and $3,000 for each kid aged 6 to 17.
Payments were designated as “periodic” to clear Senate procedural hurdles, but Democrats want to implement advance monthly checks to families of up to $300, although it’s unclear if the IRS can accommodate that request. Advance checks could start going out on July 1, the legislation indicates.
Other tax credits are augmented as well, such as the Earned Income Tax Credit. The law nearly triples the maximum amount a childless worker can receive, from $540 to $1500. The income cap for adults is also lifted from $16,000 to $21,000, a step widening its reach.
(4) Bigger SNAP benefits
The measure also aims to address hunger and food insecurity through the Supplemental Nutritional Assistance Program. It renews a 15% boost to SNAP benefits through September.
Just a few years ago, people were ready to write Snap’s obituary. User growth had plateaued and it started to look like just another social platform as rivals copied its features.
But Snap looks pretty different now from platforms like Facebook and TikTok that are enmeshed in privacy controversies. And as Tanya Dua, Lara O’Reilly, and Dan Whateley report, it’s providing the service demanded by advertisers that was missing from its early days.
“Snap is on the consideration set again,” said Amanda Grant, global head of social at WPP’s GroupM.
Of course, there are threats around every corner, like Apple’s clampdown on ad targeting on its devices, TikTok, and maybe a new platform that hasn’t even launched yet.
The global pandemic has transformed how people live in many ways – as evidenced by new high-flying media startups like audio app Clubhouse and Fable, a social-reading app.
The pandemic’s impact is also informing the kinds of media startups in vogue now.
VCs told Ashley Rodriguez and Dan Whateley they’re betting on startups that mix media with commerce, focus on social issues or mental wellness, facilitate sports betting, and bring in-person experiences online.
Snap stock bulked up as much 8% Tuesday as the social media company said it has set itself up to deliver years of revenue expansion.
The shares hit an intraday high of $68.70 that also marked a 52-week high for the photos and messaging services app. Volume was heavy, with more than 57 million shares traded intraday compared with a daily average of 20.4 million. The gain was pared to 6.6% in afternoon trading.
“Via the work on our self-serve ad platform, we’re in a position to drive multiple years of 50% plus revenue growth,” said Peter Sellis, Snap’s senior director of ad products, during the company’s investors day, according to CNBC.
Snap has been expanding its Ads Manager tools since 2017, with the platform allowing users to create ads and campaigns and gauge goals.
The work has resulted in a self-serve advertisement ecosystem that has driven cost per impression for Snap while driving return on investment for advertisers, Sellis said, according to the report.
“The more advertisers we have, the more diverse the set of ads that we can show,” said Sellis.
Snap shares have risen about 34% over the past 12 months.
President Joe Biden signed an executive action on Friday to address the financial struggles facing millions of Americans as the pandemic continues.
“We need more action and we need to move fast,” Biden said during a signing ceremony on Friday.
While Biden’s $1.9 trillion stimulus package is centered around providing aid, executives orders will allow for immediate action without having to wait for congressional approval, Insider previously reported. The move underscores the Biden administration’s intent to move rapidly to address the economic crisis caused by the pandemic.
The Biden administration is also kickstarting relief talks with Congress this weekend, attempting to garner bipartisan support for a large rescue package that’s already running into strong Republican opposition.
Here’s a detailed breakdown of what the executive action includes and how it will provide economic relief for businesses, families, and individuals:
Address the growing hunger crisis facing children and adults in America
According to the Center on Budget and Policy Priorities, one in seven households in the country are struggling to obtain the food they need. Biden is calling on Congress to extend the 15% Supplemental Nutrition Assistance Program benefit increase and invest $3 billion to help women, infants, and children get the food they require.
Increase access to nutritious foods for children missing meals during school closures
The Pandemic Electronic Benefits Transfer connects low-income families with children with the equivalent amount of money spent on school meals. Biden is asking the Dept. of Agriculture to increase the benefits by about 15% to accurately reflect the cost of missed meals during the pandemic.
Allow larger emergency SNAP allotments for lowest-income households
Congress has previously authorized emergency SNAP benefits, but those benefits have not been made available to the lowest-income households in the country. The USDA will consider extending those benefits to the households that need them the most, increasing benefit access to an additional 12 million people.
Update the true cost of a healthy diet
The USDA’s Thrifty Food Plan, which determines SNAP benefits, is not up to date with the economic realities households face when attempting to buy healthy food, so the benefits fall short of what a healthy diet truly costs. Biden will request that the USDA review the Thrifty Food Plan to better reflect the modern cost of a healthy diet.
Ensure efficient delivery of direct stimulus payments
With many Americans experiencing challenges receiving the first round of direct payments — eight million eligible households never received the checks — Biden plans to provide equitable delivery of his proposed $1,400 stimulus checks by asking the Treasury Department to improve delivery of the Economic Impact Payments. This can be done through a series of measures, including establishing online tools for claiming payments, working to make sure everyone can access the payments, and analyzing unserved households for additional outreach efforts.
Guarantee safety and economic coverage for working families
43% of American households report having at least one member of a family with a pre-existing condition, according to a Gallup poll, which makes going into work a significant health risk. As a result, Biden will ask the Dept. of Labor to clarify that workers have a federally guaranteed right to refuse employment that could jeopardize their health, and if they choose to do so, they will still qualify for unemployment insurance.
Help families, workers, and small businesses access relief quickly through coordinated benefit delivery teams
While many government programs have provided support for families struggling financially, many individuals and small businesses have encountered difficulty in navigating relief services, leaving many benefits unclaimed. As a result, Biden plans on establishing benefit delivery teams and a coordination structure across federal and state programs to provide greater ease in accessing urgent relief.
Protecting and Empowering Federal Workers and Contractors Executive Order
Biden will direct his administration on Friday to begin the work that will allow him to issue an executive order in his first 100 days to require federal contractors to pay workers a $15 minimum wage, along with providing emergency paid leave to workers.
To further protect federal employees, Biden will sign an executive order that:
Restores collective bargaining powers and worker protections
Eliminates Schedule F, which threatens critical protections of career employees and allows for civil service positions for political appointees
Promotes a $15 minimum wage for all federal workers
The US Capitol siege by President Donald Trump supporters on Wednesday has set off a range of responses and actions from big tech companies, including deleting the infamous Trump response video and temporarily freezing Trump’s social media accounts.
Following this removal, on Thursday, YouTube announced it would give channels a “strike” if its videos violated the social media platform’s policies. Following the first strike, a channel will be banned from posting for a week. A second strike within 90 days will result in a two-week ban. The third and final strike, if done within 90 days, will result in a permanent ban.
On Thursday, Facebook went one step further and decided to freeze Trump’s Facebook and Instagram accounts “indefinitely and for at least the next two weeks until the peaceful transition of power is complete,” Mark Zuckerberg, Facebook’s CEO, wrote in a post.
“His decision to use his platform to condone rather than condemn the actions of his supporters at the Capitol building has rightly disturbed people in the US and around the world,” Zuckerberg wrote. “We believe the risks of allowing the President to continue to use our service during this period are simply too great.”
“We will not amplify voices who incite racial violence and injustice by giving them free promotion on Discover,” a Snap spokesperson told Insider in June. “Racial violence and injustice have no place in our society and we stand together with all who seek peace, love, equality, and justice in America.”
“Shopify does not tolerate actions that incite violence,” a Shopify spokesperson said in a statement to Insider on Thursday. “Based on recent events, we have determined that the actions by President Donald J. Trump violate our Acceptable Use Policy, which prohibits promotion or support of organizations, platforms or people that threaten or condone violence to further a cause. As a result, we have terminated stores affiliated with President Trump.”
Twitch has also frozen Trump’s account, and will make further decisions about his account after Biden is inaugurated, The Verge reported.
On Wednesday, Twitter removed the same one-minute video that YouTube and Facebook dismissed. Shortly after, the social media platform locked Trump’s Twitter account and removed three tweets – including one with the aforementioned video – and replaced the posts with “this Tweet is no longer available” messages. As a result, Trump could either delete the tweets to gain access to his account after 12 hours or remain frozen out of his Twitter account.
On Thursday, Trump deleted the three tweets in question, and the tweets now read: “This Tweet is no longer available because it violated the Twitter Rules.” Twitter did not confirm with Insider the time the tweets were deleted, but if the original statement still holds, the 12-hour countdown until Trump has access to his Twitter account has already begun.
However, the social media platform isn’t ruling out more serious actions in the future.
“Future violations of the Twitter Rules, including our Civic Integrity or Violent Threats policies, will result in permanent suspension of the @realDonaldTrump account,” Twitter said in a statement.