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Snap outperforms Wall Street expectations for revenue, user growth

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Snap reported earnings that outperformed expectations, with the company posting $911.3M in net revenue, compared to consensus estimates of $856M in revenue. Yahoo Finance’s Jared Blikre joined Yahoo Finance Live to break down the other key metrics.

Video Transcript

SEANA SMITH: Snap is out with its earnings results. Jared Blikre has that for us. Jared.

JARED BLIKRE: That's right. And we're seeing the stock down about 6 and 1/2% in after hours trading here, maybe because of negative free cash flow. We'll get to that in a second. But aside from that, all the very-- all the top line metrics here really checking out. So revenue came in at $911.3 million, much higher than the estimate of $856 million. That's up 62% year over year. Also came in with an adjusted earnings per share of $0.09 versus $0.03 a year ago and higher than the estimate from Wall Street at $0.067.

Adjusted EBITDA coming in at 165.6 million versus estimates of 141.2 million. Now here's that line-- negative free cash flow of $69 million. And just a side note on that-- they're also saying free cash flow includes a $98 million payment for a non-recurring legal charge, so something that happened only once, related to securities class action in 2019. They see building on investments in augmented reality, mapping, and content to drive growth.

And here's their first quarter forecast. They're seeing revenue of $720 million and $740 million. And that is higher than the Street was expecting at a 705 million. Also seeing an adjusted EBITDA loss of $57 million. And that compares with an estimated profit of $17 and 1/2 million. So I think those discrepancies right there, the expected EBITDA loss and also that negative free cash flow, could be scaring the investors, at least in early trading here. But I'm sure we'll get some more color on that in the call. The stock is down about 6%. And just checking out what it's done over the last year, that has been one of the high flyers, up 207%. Guys.

SEANA SMITH: All right, thanks so much, Jared.