Once a month still counts as active… just ask your parents.

Snap falling after earnings is still a tradition unlike any other. The company beat on Q3 earnings Wednesday ($0.19 adjusted EPS vs. $0.16 expected), turned a profit ($56M vs. a $104M loss last year), guided Q4 revenue at or above the Street ($1.95B-$1.99B vs. $1.95B expected), and then promptly…

Ate sh*t.

Shares cratered about 11% after hours, wiping out a 5.9% pop from the regular session. Snap missed on revenue by about $10M ($1.72B vs. $1.73B expected) and on daily active users (495M vs. 499M). For context, the stock IPO’d at $17 in 2017 and now trades for roughly half a Chipotle burrito ($5.24 after hours).

Problem is, the users are leaving the places that actually pay the bills. North American daily users fell 6% from last year to 92M, and Europe slipped 1%. All of the growth came from the rest of the world, where Snap makes $1.13 per user (vs. $11.07 in North America). Meaning, Snap is trading $11 users for $1 users.

So naturally, starting in 2027, Snap is making monthly active users (977M this quarter) its “primary audience metric.” Per the investor letter, Snap does “not intend to optimize Snapchat around daily use at the expense of long-term value for our community.” Says the app that invented the Snapstreak.

As for the revenue miss, Snap’s ad chief of two whole months, Ronan Harris, blamed consumer packaged goods companies (think: the folks who make your cereal and toothpaste), which cut spending over “macro pressures in the U.S. and also the Middle East.” In other words, Big Cereal ain’t loyal. Ad revenue grew just 4%.

Per Evan Spiegel, the guy who turned down $3B from Facebook in 2013, ad growth “remains below our ambitions.” Which, fair. Over at Meta, ad revenue grew 26% last quarter. Mr. Steal Your Idea (read: Mark Zuckerberg) has been eating Snap’s lunch ever since Instagram copied Stories in 2016. 

The one thing working though, is subscriptions. Snap passed 30M paying subscribers (think: Snapchat+), and “other revenue” grew 84%. On the ad side, Harris wants to “look outside of the pressures in CPG,” starting with U.S. financial services brands. Because nothing says “open a Roth IRA” like the d*ck pic sharing platform camera company. Meanwhile, Ev is still all-in on Specs, the $2,195 AR glasses that activist investor Irenic Capital told Snap to spin off or shut down in April. Instead, Snap named Robert Downey Jr. the glasses’ honorary “Chief Customer Experience Officer” (a thing, apparently) and ran his ads during the World Series. Frenemy reminder: Zuck’s Ray-Ban Display glasses have been on sale since last fall, for $799. Specs preorders opened in June, and there’s still no ship date. Once again, something tells me the dude married to Miranda Kerr is being a bit premature…

Regardless, let me say it once again for the people in the back… stop trying to make Spectacles Specs happen, Ev. Until next time, friends! 

At the time of publishing, Stocks.News holds positions in Meta and Snap Inc. as mentioned in the article.