Morning Report: Tracking Snap’s First Quarter Hurdles

Morning Report: As Snap’s first earnings report approaches, here’s the analyst scorecard for its financial performance.

Snap, 2017’s premier technology IPO, will report its first quarter results May 10. The company has high expectations saddled to itself after going public with aggressive revenue growth, but persistent questions regarding profitability and user accretion remain.

Views concerning the company’s potential as a public company are diverse. That fact shows up in analyst projections regarding its expected first quarter losses (from a loss of $0.06 per share to a ten times steeper $0.61 per share), and top line, where the analyst range gyrates from a low estimate of just $125 million to a high of $195.6 million.

Yahoo Finance weights the groupings as indicating an average, expected per-share loss of $0.20 and an average revenue result of $158.2 million. As time has passed, the latter figure has risen slightly.

Why do we care? We care because the stock market has shown quite a willingness to accept and float deeply unprofitable technology companies with various growth rates. If Snap misses, perhaps even a little, and reprices, it could dampen investor interest in IPOs at a time when public markets are finally ticking along for tech’s more mature firms.

A quick sidebar to the above: If you recall Snap’s S-1 document, you’ll know that the analysts’ expected revenue result for the first quarter is smaller than its sequentially preceding result (Q4 2016). This makes sense, as Snap’s revenue is understandably seasonal. And compared to the first quarter of 2016, the projected $158.2 million is a 383.5 percent increase. Not bad.

From the Crunchbase Daily:

Flying cars taking off

• Kitty Hawk, a flying car startup backed by Google founder Larry Page, published video of a test flight and plans to start selling its first vehicle around the end of the year, according to media reports. The secretive Silicon Valley upstart is one of several companies currently working on flying car technology.

Wecash raises $80M for credit platform

• Beijing-based Wecash, provider of an online platform for assessing creditworthiness, announced that it raised $80 million in a Series C round led by China Merchants Venture Capital, Forebright Capital and SIG Ventures.

Funding falls for Austin startups

• Austin has long been known as a haven for startups attracted to its hip culture, talent pool, and growing tech ecosystem. But if the city’s recent funding performance is any indication, there’s room for improvement. Austin startups raised far less in Q1 2017 than the same period last year, posting the weakest first-quarter in more than five years, according to a Crunchbase News analysis.