Snap Inc. reported first-quarter results that topped analyst expectations, but its stock slipped about 3% as management issued second-quarter revenue guidance that largely matched Wall Street forecasts. The company said the midpoint of its Q2 revenue range sits marginally below the consensus figure cited by analysts.
For the quarter, Snap posted a loss of -$0.05 per share, beating the analyst consensus of -$0.08. Revenue rose 12% year-over-year to $1.53 billion, narrowly outpacing the $1.52 billion estimate. The company highlighted an acceleration in revenue growth compared with recent quarters, driven in part by a return to daily active user growth and expanding margins.
Despite the beat, shares moved lower after Snap issued second-quarter revenue guidance of $1.52 billion to $1.55 billion. The midpoint of that range - $1.535 billion - is slightly under the analyst consensus of $1.54 billion. Management said the guidance assumes no contribution from Perplexity, following an amicable end to that relationship in the first quarter, and also incorporates ongoing headwinds in the Middle East region.
"In Q1, we returned to growth in daily active users, accelerated revenue growth, expanded margins, and generated strong free cash flow," said CEO Evan Spiegel. "We remain focused on disciplined execution as we invest in Specs and our long-term opportunity in intelligent eyewear."
Snap reported adjusted EBITDA of $233 million for the quarter, more than doubling from $108 million a year earlier. Free cash flow reached $286 million, an increase of 150% from $114 million in the prior year. The company also noted global daily active users rose 5% year-over-year to 483 million, while monthly active users came in at 956 million.
Looking ahead to the second quarter, Snap expects adjusted EBITDA in a range of $175 million to $200 million. The company also anticipates pre-tax restructuring charges of $95 million to $130 million tied to a recent reorganization, with the majority of those charges expected to be incurred in the second quarter.
The headline reaction in the market reflected investors attention to the company guidance range and the slightly lower-than-consensus midpoint rather than the positive underlying operational trends posted for the quarter. Snap also flagged the operational assumption that Perplexity will not contribute to upcoming results and reiterated that geopolitical headwinds in the Middle East are factored into its outlook.
Key performance indicators from the quarter show improvement across users, margins, and cash flow, while the near-term outlook includes the drag of restructuring charges and regional challenges. The company continues to indicate investment in its hardware ambitions alongside disciplined execution on its core business.