Snap May Be Turning Profitable Three Years Early
Snap has been full of surprises in its first year as a public company, including a controversial redesign. The latest one may be turning profitable three years sooner than Wall Street had imagined, according to Bloomberg.
Analysts don’t expect positive adjusted net income or earnings before interest, taxes and other expenses until 2021, yet CEO Evan Spiegel has a different plan. According to The Information, he told the social media company’s employees that they should work toward break-even this year. Investors seem keen on the idea: Snap’s shares rose as much as 2.4 percent Friday.
Becoming more profitable likely means reducing costs, and Snap has already battled low morale as the company was said to forgo employee bonuses after falling short of internal goals. Snap confirmed that it cut more than 120 engineers in its biggest round of job reductions to date. The cuts are aimed at empowering the top engineering talent, and aren’t tied to products that drive revenue.