Meta’s Surge Offset by Snap’s Losses as CE 100 Index Slips 0.7%

Every three months, like clockwork, earnings season settles in.

As May dawns and the first quarter is behind us, investors get to take stock of the state of the U.S. consumer, enterprise spending — and what’s to come.

To that end, the CE 100 Index lost 0.7%, as gainers and decliners were slightly weighted toward the latter through the week. Year to date, the Index is up 12.4%. 

This time, the Communications pillar led the Index to the downside, as the group was 3.9% lower. Within that group, shares in Snap slid 13%. The Snapchat parent company’s shares plunged as it reported earnings that showed a 7% decline in revenues even as daily users gained 15% to 383 million.  

“We are working to accelerate our revenue growth and we are using this opportunity to make significant improvements to our advertising platform to help drive increased return on investment for our advertising partners,” CEO Evan Spiegel said in the statement that accompanied the earnings results. 

The “Eat” pillar sank 3%. 

Shares in Olo were down 12.1%. The company’s motion to dismiss a class action lawsuit pending against the firm was denied. As reported this week, the suit — which alleges the company made “materially false and misleading statements” and, among other things, did not disclose that Subway was ending its contract with Olo — will be allowed to proceed.

As for the slew of other earnings reports: Domino’s shares lost 3.9%. The company’s earnings this past week showed that carryout orders were up by 13.4% year over year in the first quarter, while delivery decreased 2.1%. As noted in our own coverage of the company’s earnings, Domino’s has said that the delivery sales decrease is attributable to an ongoing industry-wide shift away from delivery.

“The delivery business is still challenged by … constrained budgets for households with relatively lower disposable income, particularly when factoring fees and tips, prompting them to shift their delivery occasion to cooking at home,” Chief Financial Officer Sandeep Reddy told analysts on the call.

The Shopping vertical lost 2.3%. Within that corner of the CE 100 Index, shares in Pinterest were off 16%. The company’s own latest quarterly results show that revenues were up 5% year-over-year to $603 million. Global monthly active users also increased by 7% year over year to 463 million. Pinterest has also inked a multiyear deal with Amazon Ads, as we reported, to enhance the platform’s offering of relevant products and brands, and notably marks Amazon’s status as Pinterest’s first third-party advertising partner.

In the Pay and Be Paid designation, which lost 1.3%, Affirm lost 10.3% and Visa lost 0.3%, offsetting gains in Mastercard, which added 1.3%.

Payment Networks: Consumer Spending Resilient

Visa and Mastercard’s results show that consumers continue to spend, utilizing both debit and credit — especially in cross-border transactions amid a continued travel “snapback” — but growth is slowing. Visa said in its results that payments volumes were up 10% year on year in constant dollar terms to just under $3 trillion. Credit transaction volumes gained 13% to nearly $1.5 trillion, and debit was up 7%, also to roughly $1.5 trillion. Cross-border payments volume excluding intra-Europe volumes, were up 32%. That represents a slowdown from the 47% year-on-year growth a year ago. 

Mastercard’s earnings illuminated that gross dollar volumes were up 15% to $2.1 trillion. In the U.S., volumes gained 9% to $673 billion. U.S. credit volume swelled nearly 15% to $343 billion. 

Cross-border volumes were up 35% in the most recent quarter but have slowed a bit to 29% as of April, as management said on the call.

Only the Work and Enablers segments managed to eke out gains.

In the “work’ group, adding 0.5% overall, Coursera shares surged 18.6%. The company’s earnings announcement showed that revenues were up 23% to $147.6 million. Consumer revenue was $82 million, up 20% from a year ago, on strong demand for entry-level professional certificates. Enterprise revenue was $52.2 million, up 34% from a year ago on growth in all segment verticals. The total number of paid enterprise customers increased to 1,253, up 37% from a year ago, the company said.

In the Enablers segment, which was up 1.5%, Meta shares were 12.9% higher. Meta CEO Mark Zuckerberg said on the company’s earnings call that Meta “reached a milestone that now more than 3 billion people use at least one of our apps each day,” with Facebook hitting 200 million daily active users (DAUs) in the U.S. and Canada.  

He added that Reels monetization efficiency “is up over 30% on Instagram and over 40% on Facebook quarter over quarter,” adding that Meta’s automated and AI-driven Advantage+ Shopping Campaigns volume “is up 7x in the last six months.” The number of businesses using paid messaging on WhatsApp has grown by 40% quarter over quarter. Ad impressions were up 26% year on year.