NEW YORK, United States — Snap’s 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.
Analysts don’t expect positive adjusted net income or earnings before interest, taxes and other expenses until 2021, yet Chief Executive Officer 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 Thursday 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, Oppenheimer analyst Jason Helfstein wrote in a note.
By Catherine Larkin; editors: Arie Shapira, Courtney Dentch and Christiana Sciaudone.