Snap shares experienced a nearly 12% surge after reports of an internal memo from CEO Evan Spiegel suggested the company could exceed analysts’ projections for 2024. The memo, sent in September, indicated that Snap might achieve over 475 million daily active users in 2024, surpassing the anticipated 448 million. It also set a goal for 2024 full-year advertising revenue growth of more than 20%, compared to consensus expectations of just over 14%.
The memo disclosed a target of $500 million in adjusted EBITDA for 2023, which analysts noted would significantly surpass the current projection of $250 million. Snap confirmed the memo’s numbers but described them as “stretch, internal goals only.”
Despite the positive outlook, Bernstein analyst Mark Schilsky advised against revealing such goals in employee memos, urging the company to avoid sharing aspirational targets publicly.
Snap has faced challenges this year, struggling, like other social media firms, to improve its online advertising system after Apple’s 2021 iOS privacy update. The update limited the effectiveness of tracking users for targeted advertising. Additionally, Snap has navigated a challenging digital advertising landscape impacted by the Russia-Ukraine war and companies scaling back marketing efforts amid economic uncertainty.
In July, Snap shares dropped over 17% after providing guidance for the current quarter that fell short of analysts’ expectations. The leaked memo’s positive projections may provide a boost for Snap, which is set to report its third-quarter earnings on October 24.
