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word that X ( formerly Twitter ) is nowvalued internally at $ 19 billionhas unleashed a undulation of snickering from critics of Musk and his recently renamed societal mesh . So instead of discussing why X may have exuviate so much value since it was purchase , including the caveat that it was not deserving the $ 44 billion Musk paid when he bought it , lease ’s do a routine of comparing this morning .
The Exchange explores startups , markets and money .
Snap , another social net company with its own share of ups and down , reported itsthird - quarter financial resultsa week ago . As of this break of day , it ’s deserving $ 15.97 billion , consort to Yahoo Finance datum , which is sort of close to X ’s new internal valuation .
Fans of both Snap and X could detail a host of differences between the two services , but they also have similarities . Both are smaller social networks in a world dominated by Meta ; they ’ve been through difficult time recently with revenue dipping ; both have a subscription product and big advertizement businesses , and both are rivet on Mobile River . More importantly , they each carry significant debt .
So , allow ’s peek at Snap ’s Q3 phone number and see if we can discover out whether X ’s new evaluation is fairish , inexpensive or ambitious . To work !
A snapshot of Snap’s results
Snap ’s revenue declined in thefirst twoquarters of the year , but the fellowship returned to growth in Q3 , with its top line rising 5 % to $ 1.19 billion from a twelvemonth sooner .
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When you bet at the bottom line , Snap persist a two - story concern . On the GAAP side of affair , the company is immensely unprofitable . Its Q3 2023 net loss of $ 368.3 million was nearly unaltered from a class ago , though its operating expiration in its most recent full stop ( $ 380.1 million ) was narrower than in Q3 2022 ( $ 435.2 million ) .
But if we utilize more generous accounting techniques , Snap is just about profitable . It managed adjusted EBITDA of $ 40.1 million in Q3 2023 — that ’s 45 % less the $ 72.6 million it reported a year ago , but it ’s still in the blackamoor . The ship’s company also post confirming operate John Cash flow ( $ 12.9 million compared to $ 55.9 million a yr ago ) , but its free cash current went negatively charged in the third quarter , which is n’t so nice .
Still , Snap expects a much unassailable poop to end the year , loosely forecasting Q4 tax revenue between $ 1.32 billion and $ 1.375 billion , which would imply gross growth of about 2 % to 6 % . It also expects familiarized EBITDA between $ 65 million and $ 105 million , all predicated on reaching 410 million to 412 million daily active users . Snap come together Q3 with 406 million DAUs , for reference .
All that is worth about $ 16 billion .
So, what do we know about X?
How many people are using X ? Third - party datahas assume a negative noteand X itself hasworked to put a positive spin on thing . That said , it does n’t seem likely that X is much bigger than Snap in DAU terms , if it is larger at all .
X seems to be on track to record revenue of around $ 3 billion this year , which makes its revenue understructure a lot small than Snap ’s . Through Q3 2023 , Snap had revenue of $ 3.24 billion , which puts it on runway to time more than $ 4.5 billion this year . That ’s 50 % more than what X expect . What ’s more , Snap is arise its top line again and has been cover good interview metric , too .
In a nutshell , then : Snap is await like the honorable caller thus far .
Then there ’s lucrativeness . It is n’t a huge shock to see that X was Johnny Cash - flow disconfirming earlier this year given the company ’s monumental debt burden . Snap , too , has lots of debt , with $ 3.75 billion of elderly convertible notes alone . X , however , tookon $ 13 billion worth of debt . Sure , that gives it a much larger endeavor value , but that ’s notreallywhat we ’re looking for today . Snap , with its low debt levels , looks healthier .
