Snap Reported the First Quarterly Profit

Snap reported its first quarterly net profit on Thursday and beat analyst estimates for the fourth quarter on earnings, revenue, and user growth. Facebook parent Meta delivered disappointing guidance for the first quarter that dragged down several social media stocks with it.

Snap fell 23.6% Thursday before its earnings announcement but popped as much as 62% after hours, before settling up about 52%. It also provided a Q1 guidance range of $1.03 billion to $1.08 billion, higher than the $1.01 billion analysts anticipated, according to Refinitiv. It expects daily active users between 328 million and 330 million in the first quarter, beating analyst estimates of 327.8 million.

Snap has to contend with similar headwinds as Meta, which warned that it anticipates a $10 billion revenue hit in 2022 resulting from Apple’s privacy changes on iOS that make it harder to target consumers with advertiser content.  also distributes its app on Apple iPhones and serves advertising content to monetize its business.

Snap direct response advertising businesses experienced a recovery from the iOS changes quicker than we anticipated,” according to prepared remarks. CFO  Andersen said that Snap has been mindful to make privacy inherent to its products and as a result, the changes caused by the iOS changes are “likely to be experienced differently for our business than perhaps for others.