Market Snapshot
briefing.com
| Dow | 34006.98 | +180.91 | (0.53%) | | Nasdaq | 12196.09 | +53.87 | (0.44%) | | SP 500 | 4160.16 | +23.54 | (0.57%) | | 10-yr Note | +29/32 | 3.45 |
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| | NYSE | Adv 2133 | Dec 781 | Vol 1.0 bln | | Nasdaq | Adv 2797 | Dec 1611 | Vol 5.3 bln |
Industry Watch
| Strong: Energy, Real Estate, Industrials, Materials, Information Technology |
| | Weak: Consumer Discretionary, Utilities |
Moving the Market
-- Amazon.com (AMZN) weighing on broader market after disappointing cloud outlook
-- Other companies reporting earnings since yesterday's close receiving positive reactions, namely Exxon (XOM), Colgate-Palmolive (CL), Mondelez (MDLZ), Mohawk Industries (MHK), and Intel (INTC)
-- Treasury yields moving lower
-- Nice bounce back after First Republic Bank (FRC) related dip around mid-morning
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Closing Summary
28-Apr-23 16:30 ET
Dow +272.00 at 34098.07, Nasdaq +84.55 at 12226.77, S&P +34.13 at 4170.75
[BRIEFING.COM] The main indices were able to build on yesterday's gains, closing near their highs of the session, despite a sizable decline in Amazon.com (AMZN 105.45, -4.37, -4.0%) after the company cautioned about slowing cloud services growth after its better than expected Q1 report.
Nice gains from some blue chip names like Exxon (XOM 118.34, +1.51, +1.3%), Colgate-Palmolive (CL 79.80, +1.87, +2.4%), and Mondelez (MDLZ 76.72, +2.90, +3.9%) supported the broader market today while sharp earnings-related losses in Pinterest (PINS 23.00, -4.27, -15.7%) and Snap (SNAP 8.71, -1.79, -17.1%) kept the Nasdaq trailing its peers.
Overall, many stocks moved higher as evidenced by a relatively strong positive skew in market breadth. Advancers led decliners by an 8-to-3 margin at the NYSE and a nearly 2-to-1 margin at the Nasdaq.
In addition, the market initially took a sharp turn lower after CNBC reported that First Republic Bank (FRC 3.51, -2.68, -43.3%) is likely headed to receivership. Stocks bounced back quickly, however, signaling that the ongoing fallout at FRC is not viewed as a systemic issue. In fact, other bank stocks outperformed the broader market today. The SPDR Regional Bank ETF (KRE) rose 1.7% and the SPDR Bank ETF (KBE) gained 1.4%.
On a related note, the S&P 500 financials sector (+1.2%) was among the top performers today. The energy sector (+1.5%) registered the largest incline thanks to earnings-driven gains in XOM and Dow component Chevron (CVX 168.58, +1.63, +1.0%).
The utilities (-0.2%) and consumer discretionary (-0.04%) sectors were the only laggards that closed in the red. AMZN pinned the consumer discretionary sector below its flat line despite a nice gain in Tesla (TSLA 164.31, +4.12, +2.6%) and a big earnings-related gain in Mohawk Industries (MHK 105.90, +7.12, +7.2%).
Falling market rates were another supportive factor for equities today. The 2-yr note yield fell three basis points to 4.06% and the 10-yr note yield fell eight basis points to 3.45%.
- Nasdaq Composite: +16.8% YTD
- S&P 500: +8.6% YTD
- Dow Jones Industrial Average: +2.9% YTD
- S&P Midcap 400: +2.5% YTD
- Russell 2000: +0.4% YTD
Reviewing today's economic data:
- The Q1 Employment Cost Index increased 1.2%, seasonally adjusted, for the three-month period ending in March 2023 (Briefing.com consensus 1.1%) following a revised 1.1% increase (from 1.0%) for the three-month period ending in December 2022. Wages and salaries, which account for about 70% of compensation costs, increased 1.2% following a revised 1.2% increase (from 1.0%).
- The key takeaway from the report is that labor costs didn't show any meaningful signs of deceleration. On a 12-month basis, compensation costs for civilian workers increased 4.8% versus 4.5% in March 2022 while benefit costs increased 4.5% versus 4.1% in March 2022.
- There weren't a lot of surprises in the March Personal income and Spending Report. Personal income increased 0.3% month-over-month (Briefing.com consensus +0.2%) and personal spending was flat (Briefing.com consensus -0.1%). The PCE Price Index was up 0.1% (Briefing.com consensus +0.1%) and the core PCE Price Index, which excludes food and energy, was up 0.3% (Briefing.com consensus +0.3%).
- The key takeaway from the report is that the core PCE Price Index, the Fed's preferred inflation gauge, held fairly steady at persistently high levels, checking in at 4.6% year-over-year versus 4.7% in February. The stickiness of that component should keep the Fed sticking to its rate-hike ways.
- The Chicago PMI rose to 48.6 in April (Briefing.com consensus 43.4) from 43.8 in March.
- The final University of Michigan Consumer Sentiment Index for April checked in at 63.5 (Briefing.com consensus 63.5), unchanged from the preliminary estimate. The final reading for March was 62.0. In the same period a year ago, the index stood at 65.2.
- The key takeaway from the report is that consumer sentiment remains pinned at lower levels, stemming in part from inflation pressures that are dragging on attitudes about personal finances due to higher expenses.
Ahead of the open on Monday, Global Payments (GPN), ON Semiconductor (ON), Norwegian Cruise Line (NCLH), KBR (KBR), and SoFi Technologies (SOFI) are among the more notable companies reporting earnings.
Market participants will receive the following economic data on Monday:
- 9:45 a.m. ET: April IHS Markit Manufacturing PMI - Final (prior 50.4)
- 10:00 a.m. ET: March Construction Spending (Briefing.com consensus +0.1%; prior -0.1%) and April ISM Manufacturing Index (Briefing.com consensus 46.8%; prior 46.3%)
Treasuries log gains across the curve; Major indices trying to close near session highs
28-Apr-23 15:40 ET
Dow +200.31 at 34026.38, Nasdaq +51.78 at 12194.00, S&P +25.85 at 4162.47
[BRIEFING.COM] The major indices are trying to close this last trading day in April on an upbeat note.
Treasuries settled with gains across the curve. The 2-yr note yield fell three basis points to 4.06% and the 10-yr note yield fell eight basis points to 3.45%.
Ahead of the open on Monday, Global Payments (GPN), ON Semiconductor (ON), Norwegian Cruise Line (NCLH), KBR (KBR), and SoFi Technologies (SOFI) are among the more notable companies reporting earnings.
Market participants will receive the following economic data on Monday:
- 9:45 a.m. ET: April IHS Markit Manufacturing PMI - Final (prior 50.4)
- 10:00 a.m. ET: March Construction Spending (Briefing.com consensus +0.1%; prior -0.1%) and April ISM Manufacturing Index (Briefing.com consensus 46.8%; prior 46.3%)
Energy complex futures settle higher
28-Apr-23 15:00 ET
Dow +180.91 at 34006.98, Nasdaq +53.87 at 12196.09, S&P +23.54 at 4160.16
[BRIEFING.COM] The main indices settled into narrow trading ranges recently.
Energy complex futures settled the session higher. WTI crude oil futures rose 2.5% to $76.76/bbl and natural gas futures rose 1.0% to $2.59/mmbtu.
On an energy related note, the S&P 500 energy sector (+1.4%) sits atop the leaderboard by a wide margin thanks to earnings-driven gains in Exxon (XOM 118.29, +1.46, +1.3%) and Chevron (CVX 168.29, +1.36, +0.8%).
Separately, the U.S. Dollar Index is in a slow, steady incline, up 0.2% to 101.67.
Charter, ResMed outperform following earnings
28-Apr-23 14:30 ET
Dow +184.58 at 34010.65, Nasdaq +50.38 at 12192.60, S&P +24.03 at 4160.65
[BRIEFING.COM] The S&P 500 (+0.58%) is today's best performing major average to this point. Momentum has mostly leveled off in the last half hour.
S&P 500 constituents Catalent (CTLT 50.50, +3.55, +7.56%), Charter Comm (CHTR 369.04, +26.29, +7.67%), and ResMed (RMD 241.07, +15.77, +7.00%) are among today's top gain getters. CTLT moves higher after unconfirmed chatter, while CHTR and RMD move higher post earnings.
Meanwhile, beverage giant Keurig Dr Pepper (KDP 32.33, -1.21, -3.61%) continues its earnings-related losses, down now about -8% on the week.
Gold recovers from morning lows, ends little changed on Friday
28-Apr-23 14:00 ET
Dow +164.35 at 33990.42, Nasdaq +37.48 at 12179.70, S&P +21.93 at 4158.55
[BRIEFING.COM] With about two hours to go on Friday the tech-heavy Nasdaq Composite (+0.31%) is currently the worst performing major average, albeit on gains of about 37 points today.
Gold futures settled little changed at $1,999.10/oz, up about +0.4% on the week, as the dollar and yields currently host modest weekly losses.
Meanwhile, the U.S. Dollar Index is up about +0.1% to $101.58.
Market's bullish temperament gets dialed back
The stock market staged a welcome rebound effort on Thursday, drafting off the strong response to Meta Platforms' (META) earnings report and a battery of other reports that tempered concerns about the economy being quickly headed for a hard landing.
The same perspective has not carried over this morning. In some respects, the market's temperament has reversed.
Amazon.com (AMZN), which reported better than expected results after yesterday's close, jumped close to 10% in after hours action, but that gain got reversed abruptly and then some after the company cautioned about a slowdown in its cloud services business.
Shares of AMZN are down 2.3% in pre-market trading, which has put a damper on the equity futures market along with some disappointing results and/or guidance from Snap (SNAP), Pinterest (PINS), and Cloudflare (NET), and some soft Q1 GDP data out of the eurozone.
Briefly, eurozone GDP was up 0.1% quarter-over-quarter versus an expected 0.2% increase. Germany, meanwhile, registered a 0.1% quarter-over-quarter decline versus an expected 0.3% increase.
This news followed on the heels of the Bank of Japan voting to leave it key policy rate unchanged at -0.10%, as expected. The BOJ did not make any changes to its yield curve control policy but it did remove a pledge to keep rates at or below current levels from its guidance.
Next week all eyes will be on the Fed, which is largely expected to raise the target range for the fed funds rate by another 25 basis points to 5.00-5.25%. That expectation should not shift following this morning's important economic data, which had some important inflation indicators accompanying it.
The Q1 Employment Cost Index increased 1.2%, seasonally adjusted, for the three-month period ending in March 2023 (Briefing.com consensus 1.1%) following a revised 1.1% increase (from 1.0%) for the three-month period ending in December 2022. Wages and salaries, which account for about 70% of compensation costs, increased 1.2% following a revised 1.2% increase (from 1.0%).
The key takeaway from the report is that labor costs didn't show any meaningful signs of deceleration. On a 12-month basis, compensation costs for civilian workers increased 4.8% versus 4.5% in March 2022 while benefit costs increased 4.5% versus 4.1% in March 2022.
There weren't a lot of surprises in the March Personal income and Spending Report. Personal income increased 0.3% month-over-month (Briefing.com consensus +0.2%) and personal spending was flat (Briefing.com consensus -0.1%). The PCE Price Index was up 0.1% (Briefing.com consensus +0.1%) and the core PCE Price Index, which excludes food and energy, was up 0.3% (Briefing.com consensus +0.3%).
The key takeaway from the report is that the core PCE Price Index, the Fed's preferred inflation gauge, held fairly steady at persistently high levels, checking in at 4.6% year-over-year versus 4.7% in February. The stickiness of that component should keep the Fed sticking to its rate-hike ways.
Notably, the equity futures market didn't get unstuck from negative territory after the data but they improved slightly. The S&P 500 futures are down 10 points and are trading 0.2% below fair value, the Nasdaq 100 futures are down 10 points and are trading 0.1% below fair value, and the Dow Jones Industrial Average futures are down 116 points and are trading 0.3% below fair value.
-- Patrick J. O'Hare, Briefing.com
Exxon Mobil still gushing with earnings and cash flow as it ramps up production (XOM)
Oil and gas giant Exxon Mobil (XOM) is still gushing with profits and cash flow, despite a sharp pullback in commodity prices, as reflected in the company's 1Q23 earnings report. To meet rising global demand, XOM boosted its production by nearly 300,000 barrels per day, pushing its earnings to a Q1 record of $11.4 bln. Most of that increase came from XOM's Permian Basin and Guyana assets, which saw a combined 40% jump in production.
- The other main factors behind XOM's better-than-expected earnings include strong refining margins and the Beaumont refinery expansion start-up on March 16, adding 250,000 barrels per day of capacity. Combined, these items drove profit higher by 2.8% sequentially to $4.2 bln for XOM's Energy Products segment.
- For some context, this segment posted a loss of nearly ($200) mln in the year-earlier period.
- In the Upstream segment, moderating crude oil and natural gas prices had a significant impact. With crude and natural gas realizations lower by 10% and 23%, respectively, from Q4, Upstream earnings fell by 26% qtr/qtr to $6.5 bln.
- Still, XOM was able to mitigate the steep price declines by ramping up production to 3.8 mln oil equivalent barrels per day.
- In total, XOM's cash flow from operations reached a staggering $16.3 bln, up about 10% yr/yr. It's hard to imagine now, given how robust XOM's business is, but in 4Q20 the company generated cash flow of just $4.8 bln.
- In 2020, the company also posted its first net loss in over 40 years, amplifying concerns that it will need to significantly cut its dividend. Today, that dividend, which currently yields about 3.1% annually, looks very safe.
- On the topic of capital allocation, XOM CEO Darren Woods has taken a conservative approach, choosing to hold on to a war chest of cash in the event that the economy sours and commodity prices plunge. However, a major acquisition can't be ruled out, either.
- The Wall Street Journal has reported that XOM is taking a look at Pioneer Natural Resources (PXD), an oil and gas exploration and production company headquartered in Texas. An proposed acquisition of PXD, which has a market value north of $53 bln, would face plenty of scrutiny from regulators.
Looking ahead, XOM should benefit from strong travel demand during the busy summer months, pushing volume higher for both gasoline and jet fuel. Mr. Woods commented during the earnings call that refining margins should rise going forward into the summer.
The main takeaway is that while XOM's results aren't quite at the blockbuster levels seen in Q4, they are still very strong. Barring a meaningful downturn in the global economy, XOM may be in line to generate another record quarter of earnings in Q2 as it continues to ramp up production.
Skechers USA kicks off FY23 on the right foot as robust overseas demand fuels huge Q1 EPS beat (SKX)
Skechers USA (SKX +6%) is setting 52-week highs today as shares skip toward levels not seen since August 2021 following the footwear manufacturer's widest earnings beat in over five years last night. SKX also topped sales estimates in Q1, reaching the $2.0 bln milestone, underpinning healthy demand despite a dynamic retail landscape and lingering macroeconomic challenges.
- SKX's 10.0% revenue growth yr/yr was almost entirely fueled by sales outside the U.S., where inventory congestion continued to meaningfully impact orders. In fact, domestic wholesale revs, which comprised a fifth of total revenue in Q1, tumbled by 17.9%. However, it is important to remember that this business was lapping a robust +43% jump in revenue as Western U.S. port congestion eased. Compared to 1Q21, domestic wholesale revenue experienced a 17% increase in Q1.
- SKX warned that Q2 will likely see the worst domestic wholesale revenue declines, evidenced by its Q2 EPS and sales guidance missing estimates, but then improve during 2H23.
- Although U.S. wholesale underperformed significantly in Q1, direct-to-consumer (DTC) sales in the U.S. soared by 24.9% yr/yr. Meanwhile, SKX's International businesses, including wholesale and DTC, surged by 19.6% and 24.2%, respectively. With SKX deriving just under two-thirds of its total revenue from overseas markets, the exceptional growth outside the U.S. more than offset the weakness in domestic wholesale.
- A notable highlight emerged in China, where growth finally turned positive after three consecutive quarters of at least 19% yr/yr declines. The region edged 3% higher as consumers began enjoying outdoor activities after lengthy COVID restrictions.
- However, SKX remained cautiously optimistic about a continual recovery in China, given how volatile the region has been over the past few years. Also, the company's initial core assumptions in its FY23 outlook remained applicable despite the buoyant Q1 numbers. That is, SKX is still facing numerous uncertainties surrounding macroeconomic conditions and a dynamic wholesale landscape.
- Nevertheless, SKX raised its FY23 forecasts, projecting adjusted EPS of $3.00-3.20, up from $2.80-3.00, and revs of $7.9-8.1 bln, up from $7.75-8.00 bln.
Overall, SKX's domestic wholesale business aside, Q1 results reflected robust demand, particularly overseas, despite relatively more challenging economic conditions compared to the U.S.
While SKX's uplifting report signals positive demand dynamics for the footwear industry, some of its peers may not relish the same success. For example, Deckers Outdoor (DECK), which reports Q1 earnings on May 18, derived only 31% of total FY22 revs from overseas markets, meaning it could face domestic troubles like SKX. Likewise, Under Armour (UAA), which reports Q4 (Mar) earnings on May 9, only received a third of its FY22 (Mar) sales internationally. However, on the flip side, NIKE (NKE) depended on the U.S. for only 41% of its FY22 (May) revenue, positioning it nicely to enjoy the resilient overseas footwear demand.
Intel's results still not much to look at, but signs of a bottoming out enough to spark rally (INTC)
A cynic might say that beleaguered chip maker Intel (INTC) actually posted dismal 1Q23 results and that the stock is rallying simply because it hurdled rock bottom expectations with shares down by more than 40% since early 2022. Afterall, revenue did collapse by 36% yr/yr -- its worse decline in over five years -- and Non-GAAP gross margin continued to tumble lower, falling by nearly 15 percentage points on a yr/yr basis to 38.4%. We can't argue with those facts, but we do believe there is another reason why the stock is jumping higher, other than being ripe for a bounce after its freefall.
- For the past few quarters, investors and analysts have been looking for signs of a bottoming in INTC's financials and its PC end market. The company's 1Q23 report revealed some green shoots, indicating that its business may finally be stabilizing as it attempts to claw back market share losses at the hands of rival Advanced Micro Devices (AMD).
- For starters, INTC issued inline Q2 revenue guidance of $11.5-$12.5 bln. That may not seem like much of an accomplishment, until considering that INTC issued downside revenue guidance in every quarter last year.
- Furthermore, the midpoint of its guidance equates to a yr/yr decline of about 21.5%, representing an improvement from this quarter's nosedive. Again, a small, but notable win for INTC.
- In the PC-centric Client Computing Group (CCG) segment, revenue sank by 38% to $5.8 bln as INTC's OEM customers continue to work through inventory amid a soft demand environment.
- According to research firm IDC, PC shipments decreased by 29% in Q1, continuing a fallout in the wake of a pandemic-driven boom.
- However, during the earnings call, CEO Pat Gelsinger stated that he's seeing signs of stability in the PC market with inventory corrections proceeding as anticipated.
- He added that, due to that surge in demand during the pandemic, that the PC usage and installed base is about 10% higher than pre-COVID levels, which bodes well for INTC when users refresh their PCs.
- The news isn't quite as bullish on the server side. Revenue in the Datacenter and AI (DCAI) segment plunged by 39%, mainly driven by soft demand from enterprises and international markets.
- In Q1, server consumption TAM declined on both a sequential and yr/yr basis and INTC continues to expect another yr/yr decline in Q2.
- The silver lining is that the company still expects a modest recovery in 2H23, with enterprise and international recovering at an accelerated rate.
- INTC's slumping gross margins, which have been battered by a combination of rising investments in its IDM 2.0 strategy (building out its factory network) and the chip correction cycle, are expected to dip again in Q2.
- Specifically, INTC guided for Non-GAAP gross margin of 37.5%, down 90 bps from Q1. That may seem like more bad news, but the drop is far less severe than the 540 bps decline experienced in Q1, adding to the notion that business is starting to stablize.
The main takeaway is that this was far from a strong performance for INTC, reflecting ongoing weakness in its core markets, but a poor report was widely anticipated. Therefore, the focal point rested on whether INTC has reached the bottom of this painful downturn. Using that criterion as a benchmark, the earnings report and outlook hit the mark -- as low of a target as it may have been.
Amazon popped initially following earnings, but a cautious earnings call took the stock lower (AMZN)
Amazon (AMZN -4%) initially jumped 8% following earnings last night, but the stock started to pullback during the earnings call. The headline numbers were great with EPS and revenue upside. Operating income was nicely above prior guidance. The Q2 revenue ($127-133 bln) and operating income ($2.0-5.5 bln) guidance were both in-line. Investors got excited initially but then the concerns we mentioned in our preview started to come to light during the call.
- Let's start with the Stores segment. Amazon said it was pleased with growth for this segment, including a sequential revenue acceleration in the International segment fueled by easing macroeconomic pressures in Europe. However, macro issues are continuing to drive cautious spending among consumers. Customers are looking to stretch their budgets and are moderating their spending on discretionary categories and focusing more on lower-priced items.
- Turning to AWS, we had some concerns going in, given the decelerating growth we saw from Azure earlier this week. The AWS segment posted +16% growth in constant currency (CC), which continues its downward trend from +20% CC in Q4, +28% CC in Q3, +33% CC in Q2 and +37% CC in Q1. Amazon is seeing enterprises continue to be cautious in their spending. Customers are looking for ways to save money however they can right now. Customers describe it as cost optimizing rather than cost cutting. But one of the benefits of the cloud is that you easily scale up or down depending on demand, which is not the case with on-premise infrastructure.
- Advertising Services segment revenue grew +23% CC, which was flat compared to the +23% CC growth in Q4, +30% CC growth in Q3 and +21% CC in Q2. This segment tends to be more up and down, but it is holding up better than we would have expected. Amazon believes it's bucking wider advertising trends because, even in difficult economies, most people still shop. Having the largest e-commerce shopping venue is a big advantage because sellers want that reach. It also helps that Amazon has made substantial investments in machine learning to make sure that end customers see relevant ads.
Overall, the concerns we mentioned in our preview came to pass for the most part. The initial pop higher was great to see and made us think we were too bearish in our preview. However, the concerns we had came to light during the call. The Stores segment held up fairly well, but Amazon's cautious comments on the consumer were a letdown. AWS was not great with CC growth falling to the mid-teens as clients become more cautious. Advertising held up well. The report itself was solid but Amazon's cautious commentary took the shine off those numbers. Also, we also think the stock had gotten a little ahead of itself (+31% YTD), so people are using this as a reason to book recent gains.
Snap breaks below YTD lows as Q1 revenue miss and light Q2 sales guide spooks investors (SNAP)
Snap (SNAP -18%) is breaking below YTD lows today despite surpassing Q1 earnings estimates as its sales miss and underwhelming Q2 revenue forecast spooks investors. Since last quarter, SNAP stopped providing formal quarterly revenue guidance due to uncertainties in the global economy. However, the social media platform has provided its "internal revenue" forecast, as well as where it expects daily active users (DAUs) to land.
Unfortunately, even though SNAP's DAU projection of 394-395 mln translated to another quarter of yr/yr and sequential growth, its internal revenue range of $1.00-1.09 bln -- expecting to hit closer to $1.04 bln -- fell short of analyst expectations. Its relatively lofty 53x forward earnings multiple is also not helping matters.
Although a challenging ad demand landscape is well-known by now, recent Q1 reports from Meta Platforms (META) and Alphabet (GOOG) contained encouraging signs that perhaps the ad market was finally stabilizing. For example, META saw ad revenue expand across each major geographic region, aside from a minor 1% dip in Europe, helping drive its decent Q2 sales forecast. Meanwhile, GOOG registered essentially flat advertising revenue yr/yr after two consecutive quarters of decline.
Therefore, even though SNAP commented that advertising demand showed signs of stabilizing in Q1, its 12% drop in its brand-oriented ad business was well below its peers' numbers, driving its total sales decline of 7.0% yr/yr to $988.61 mln, missing analyst expectations.
- Why did SNAP's ad business experience such a substantial drop? SNAP has been rolling out new improvements to its direct-response (DR) advertising platform, actions it warned could disrupt demand over the near term last quarter. This materialized in Q1, as these changes were the primary cause of SNAP's weak ad revenue. The company noted that although ad partners adjusted to the changes, a few top partners have still not recovered the volume of actions they previously drove on the platform.
- Furthermore, with just 15% of FY22 revs stemming from markets outside North America and Europe, SNAP does not boast similar global diversification as META and GOOG, which derive 20-30% of revs from these markets. Therefore, despite SNAP's Rest of World region enjoying 34% revenue gains yr/yr in Q1, compared to a 16% and 3% decline in North America and Europe, respectively, its small footprint in these areas could not meaningfully offset the pronounced declines in its core markets.
- On the bright side, DAUs of 383 mln, a 15% jump yr/yr, met SNAP's 382-384 mln target. Also, Snapchat+, the company's subscription business, added 1.0 mln subs from Q4, bringing the total to 3.0 mln, a significant feat given it was launched less than a year ago.
- Additionally, SNAP completed reprioritizing its cash cost structure, reducing annualized costs by over $500 mln. This fueled SNAP's adjusted EBITDA of roughly $1.0 mln in Q1, consistent with its remarks last quarter of achieving adjusted EBITDA breakeven by Q1.
Nevertheless, the few silver linings from Q1 are insufficient to stave off a wave of sellers homing in on weaker-than-expected revs from the quarter and a lackluster Q2 revenue guide. Furthermore, peers indicating potential signs of stabilization in the advertising market ahead of SNAP's Q1 report only added insult to injury.
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