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00:00Really interesting news going on with SNAP. Take a look at the quarterly results. I want to walk you through the numbers first. Third quarter daily active users come in and improvement. Three hundred sixty three million. Estimates were for three fifty eight point seven million. Third quarter adjusted EBITDA. That's our new outlook for profitability, according to Mandy, seeing seventy two point six million versus estimates of 24. And that gets us to a third quarter adjusted EPS of eight cents vs. a loss per share of what was expected of two point two cents. That all sounds good. And then you get comments that SNAP will not be providing formal financial guidance for the fourth quarter. But they are authorizing a stock buyback of up to five hundred million dollars. All, of course, on steadiness of revenue. Three quarter revenue, one point one. Three billion estimates were for one point one 4 billion. Really pleased to see that. Mandy seeing, senior technology analyst for Bloomberg Intelligence here. We've given you a cool 30 seconds. Break down the numbers. What is going on in this post market? Well, I think the top line numbers, specially that KPI is the daily active user count in the U.S. as well as just Citi. But done number is a beat and low expectations for a low going into the quarter. So I'm not surprised that, you know, they beat those numbers. But to me, this just points that you're not going to see more negative revisions going forward. Why are they giving us guidance for the fourth quarter? Well, it's an uncertain environment. And we know that, you know, no one exactly knows how the macro is going to play out and advertising. Given the cyclical nature, we kind of expected that. But I think with any consumer Internet company, it all comes down to the daily active users engagement. And that has to understand that growing the daily active users, they're also seeing a decent amount of time spent on the app. Overall, what is it in here that has really, you know, the fact that this is a stock that has already gone from one hundred billion dollar valuation to a 20 billion dollar valuation. It's eroded more than 80 percent from its highs. What more is there to dislike? How could this not be priced in? And you're right, it is. So at the end of the day, you know, you have to ask yourself, does does this company outpace the overall growth in their digital ad industry? And the answer is most likely, yes. Given the size, given the engagement, there are only three or four platforms with a daily active user base of around 100 million in the U.S. and you can count them. You know, it's ticktock, Metta and YouTube. So snapping the fourth one. So as an advertiser, you don't have a lot of places to go to if you want to really spend those dollars. The question is then do those dollars come back the way it used to be? Back in 2020? I know that you rightfully so. Talk about the numbers relative to the estimates. Jump on with me on a tangent to do the year over year numbers. I'm curious how you think about this free cash flow, 18 billion, but a year ago we were at 52 million adjusted. He beat out with 73 million. Again, these are better than expected, but year over year that was one hundred million dollars more than previous year. Look at the growth rates last year. Last year, they were growing at 50 percent. Now they are growing mid single digit still. I think they were cash flow positive. That's a positive sign that they are cutting costs. And the biggest problem with Snapple is their cost structure was kind of bloated relative to the peers. So that's why they announced that major job cut. I think it was about 20 percent. And that was kind of hinting at the right direction that, look, we care about controlling costs here. I mean, what we got to remember is it's down 20 percent after ISE. But this is a stock that generally moves about 20 percent after hours after earnings. And actually usually to the downside, the options market had already priced in the fact that we're likely to get these wild swings. But we also are learning that this is the slowest growth ever, quarterly growth ever to snap. And is it just really that people just hoped they'd beat these incredibly low expectations, hoping for some sort of flavor of of of positive mood music? Yes, I think they are looking at each of the metrics and obviously not everything kind of look clean in this print. But at the same time, you really have to think about inflection with a stock like. Yeah. Not maybe this is not the quarter. Maybe it's for Q but to your point, if it's down 80 percent, there will be a valuation trough and that will be signaled by, you know, when we'll see an uptick in advertising. And to my mind, you know, you've seen 30 percent cut for next year estimates in the case of Snapchat for better, it's just dropped to 13 percent. So guess what? If this is bad, you could get an even worse friend for a better next week, which is why the following year, the 500 million dollar stock buyback, after you're looking at downsizing the company, is that the appropriate use of cash? I mean, it's sending the right signals to investors that, look, we are controlling costs. We think. Stock is cheap and we are initiating a buyback now. Bill, five hundred million make a big difference in the grand scheme of things. Probably not. But at the same time, I think there is trying to suggest that we will be free cash flow positive next year. I think going to be more changes necessary. Or is it just patience that is needed from an investor base right now? Do you want to see the slashing, of course, work force, the focus on trying to preserve some sort of margin? Do they need to do more to stabilize this company? Yes. And that's why it's good that they've been big in terms of their 20 percent cut. It kind of signal, look, we know what it takes to be a free cash flow positive and they announce that upfront as opposed to doing it in, you know, two different rounds or three different rounds. So I do think cost control was required because the overhead during the pandemic, they grew their employee base almost 30 percent every year. Now, you could argue, you know, if you are growing at 50 percent, you can keep growing your employee base by 30, 40 percent. But if you are growing mid single digit or high single digit, then I think they are trying to fix that cost structure right now.

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Snap Sees Slowest Sales Growth Ever

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