Snap Disappoints Yet Again During Q3, but User Growth Makes Us Optimistic

For the third consecutive quarter Snap disappointed the Street with miss on the third-quarter top- and bottom-line when compared with the FactSet consensus estimates. While daily average users expanded impressively, monetization remained difficult. In addition to factors such as macroeconomic uncertainty and Apple’s privacy policies, changes in Snapchat user behavior are also increasing hesitancy by advertisers. While these changes may also be hindering ad revenue growth for Meta and Alphabet, we believe it is a lesser concern for these firms.