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Hey Snackers,
The Tampa Bay Buccaneers won the Super Bowl, and The Weeknd's creepy choir won the halftime show. It was quarterback Tom Brady's 10th Super Bowl... and Robinhood's first.
Stocks soared for the week, with all three major indexes (the S&P 500, the Nasdaq, and the Dow) hitting record highs. Investors were optimistic about the possibility of a new (bigger) stimulus package, as the Senate moved forward with President Biden's $1.9T Covid relief plan.
AR
Facebook is slaying the ARPU game, so Snap should lean into its camera
Filter wars... 2020 was a big year for social. It was how we connected, doom-scrolled, entertained ourselves, and tapped our worries away. Now that Facebook and Snap have dropped full-year earnings, we have proof: they both crushed it — but Snap is still a small fish compared to Facebook (think: Nemo vs. blue whale). In 2020:
- Users: Facebook's daily users jumped 11% to 1.84B. Snap's jumped 22% to 265M. Wild stat: typical users opened Snap 30 times per day last quarter.
- Sales: Facebook's ad sales popped 21% to $84B. Snap's sales soared 46% to $2.5B, as its active advertisers doubled from 2019.
- Profit: Facebook's profit soared 58% to $29B. Snap has still never posted a profit, though its loss shrank to $945M.
You ARPUnny... One number fascinated us: ARPU (aka, average revenue per user). ARPU = a company's sales divided by its users. The ARPU gap between Facebook and Snap is massive — especially in North America, which makes up nearly half of FB's sales, and more than 70% of Snap's. In North America:
- FB makes 10X more per user than Snap does. Last quarter, Snap's average revenue per daily user was $7. Facebook's was $70. Why advertisers pay more for FB:
- FB has better ad targeting: it collects more user data (knows what you like), and it's older than Snap (knows what you've liked since you were 13).
- It has billions of users (bigger reach potential), and they skew older than Gen Z Snap (bigger spend potential).
Snap should augment itself (AR-style)... Snap is proud of its "privacy-first" approach, so it likely won't collect more data to try to beat FB. But it can boost ARPU by making ads more engaging. One key way it's doing that: Augmented Reality. Snap launched AR ads with companies like Estee Lauder and Dior, letting you virtually try on lipstick shades and shoes. These shoppable lenses have attracted new advertisers during the pandemic. Snap calls itself a "camera company," and it's leaning into this identity to stand out to brands. What Snap lacks in data, it could make up for with creativity.
Highs
Who's up...
Biggest kiss cam fails of the 90s... When you're five hours deep into a YouTube rabbit hole, you don't question the content. Google shares surged 14% for the week on expectation-topping earnings. Sales soared 23% last quarter, driven by YouTube and Search ads: YouTube revenue jumped 46%, proving that Google's core ad biz is stronger than ever after the pandemic slowdown (#adpocalypse).
Just keep pinning... After seeing its shares more than triple in 2020, Pinterest has mood-boarded its way to another success: the stock jumped 20% for the week on inspo-worthy earnings and user growth. As we sat in bed pinning our post-pandemic getaway, Pinterest's sales jumped 76% last quarter from a year earlier. It also notched a $208M profit, compared to a loss a year ago. Pinterest has been investing in ad tools to compete with social media — that seems to have paid off.
Lows
...and who's down
"Now I drive alone past your street"... Sad. Spotify shares plunged after it reported quarterly earnings last week. Investors were bummed about a wider-than-expected loss, though sales and user growth were solid. The real bright spot: podcasts. 25% of Spotify's 345M users listened to pods last quarter, and listening hours nearly doubled from 2019. Joe Rogan went Spotify-exclusive, driving new pod-heads to the platform. With music, Spotify has to pay record labels for streams. With pods, it gets more bang for its subscription buck. And with original pods, it can "double dip" by running its own ads.
Exx-on, exx-off... Gas legend Exxon lost a ginormous $20.1B last quarter, its fourth-straight losing quarter. For the full year, Exxon lost more than $22B — compared with a $14.3B profit in 2019. The pandemic crushed oil demand, but prices have been rising since the pandemic plunge. Exxon shares actually jumped for the week since investors think the WOAT is over.
What else we’re Snackin’
- Do: The "Face Everything Technique" (why avoiding difficulties doesn’t work).
- Talk: Four smart Zoom tricks to level up your work game (Zoom-mojis exist).
- Earn: The average net worth of American households at different ages.
- Enjoy: How much free time you really need each day to be happy.
- Move: Why you shouldn't underestimate the power of walking.
- Save: How to get back on track if you already blew your budget.
This Week
- Monday: Earnings expected from Hasbro
- Tuesday: Earnings expected from Twitter, Canopy Growth, Cisco, and DuPont de Nemours
- Wednesday: Earnings expected from GM, Uber, Coca-Cola, and Under Armour
- Thursday: Weekly jobless claims. Earnings expected from Disney, AstraZeneca, and Kraft Heinz
- Friday: Earnings expected from Dominion Energy
Authors of this Snacks own shares of: Snap and Google
Disclosure: Robinhood Snacks is owned by Robinhood
ID: 1515284
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