We will be hosting a call to discuss both our near-term and long-term outlook for SNAP. We will run through the various headwinds that we expect to hinder SNAP's DAU and revenue growth prospects, and discuss how we expect the story to play out over the course of the year and into 2018.
KEY POINTS OF DISCUSSION
- USER GROWTH: We estimate that SNAP has already captured the lion’s share of the low-hanging fruit in both North America & Europe. Incremental penetration will be tougher to come by given both structural hurdles internationally and a remaining TAM that is decidedly older; much of which FB has already penetrated. SNAP still has some runway, but growth will come at a much slower/lumpier pace.
- MONETIZATION: The limitations of SNAP's user growth trajectory also means the longer-term revenue story is in question, especially since the monetization gap between SNAP and FB isn’t as nearly wide as the ARPU metrics suggest, which also means profitability isn’t a guarantee. While SNAP has real runway for near-term revenue growth, consensus is overshooting that part of the story.
- POSITION: The 1Q print confirmed much of our early thoughts on SNAP, but more importantly gave us more clarity around the trajectory of the story and timing of our catalysts, which we detail during the call.
Call details and deck will be published tomorrow morning.
