Snap internally targets Q2 revenue of $1.00B-$1.09B, consensus $1.1B

Sees Q2 DAU 394M-395M and adjusted EBITDA around ($75M). In his shareholder letter, CEO Evan Spiegel further stated: "As we look forward to Q2, we expect to face continued disruption in demand related to the advertising platform changes initiated early in Q1. While many of our most sophisticated advertisers have already begun to navigate these changes and resume growth in their spend with us, we anticipate that it will take time for some of our advertisers to fully recover and for our models to become better tuned to their new objectives. In addition, we have some concern that advertisers who rely on backward-looking signals, such as lift studies, may have a delayed reaction to the changes made in early Q1 that could impact their advertising spending in Q2. Our internal forecast for Q2 is built on the assumption that DAU will be between 394 and 395 million. In Q2, we expect to make incremental investments that we believe are critical inputs to deepening engagement and accelerating topline revenue growth. These investments will show up in large part as cloud infrastructure expenses, which we estimate could add 8c to 12c to our infrastructure cost per DAU in Q2, relative to the Q1 actual of $0.59. The exact magnitude of the impact to infrastructure costs will depend in large part on how fast we are able to productively ramp investment in these programs. These infrastructure investments, combined with the investments we have made in the Stories revenue share program, are expected to place downward pressure on gross margins in the near term, but are anticipated to be substantially accretive over time. Our investments in the Stories revenue share program have been substantial in each of Q4 2022 and Q1 2023, but they have been largely offset to date by the reductions we made to fixed content costs over that same period and will therefore become visibly impactful to gross margins beginning in Q2 2023. In addition, while we expect to remain highly diligent with respect to growth in our reprioritized adjusted operating cost structure, we anticipate adding talent to our team in support of our ML cloud infrastructure investments as well as to support go-to-market efforts for our advertising business. These investments are expected to drive modest sequential growth in headcount and personnel costs over the next few quarters, even as we remain well below the peak headcount levels of 2022. Given these plans, our internal revenue range for Q2 is $1.00B to $1.09B, with an internal forecast of $1.04B, implying a year-over-year decline of 6% and quarter-over-quarter growth of 5%. Given this internal forecast for revenue, we anticipate that adjusted EBITDA will be between negative $100 million and negative $50 million with an internal forecast of negative $75 million for Q2."