It's so confusing to me see headlines calling this a "huge earnings miss". Revenue was greater than expected, as was ARPU. I get that the users are under, but this seems pretty far from a huge miss, no?
A basic quantitative analysis of earnings estimates reveals that they are not particularly accurate when compared to the earnings guidance given by the company itself, and in the rare cases where companies provide no guidance, estimates are almost worthless.
All this is to say don't confuse the term "Wall Street estimates" with what people who actually buy and sell stock estimate. The actual people who have skin in the game and face tangible consequences if they're wrong don't take these earnings estimates that seriously, and conversely the analysts who produce these estimates don't have much of any skin in the game themselves and suffer next to no consequences for being wrong.
It's like sports teams and all of the talking heads giving their opinions on the upcoming matches. In sports, it's called betting. But in business, it's called investing. It's the same thing, only one is more widely accepted an legal.
One incentivizes people to build iPhones and the other takes money from poor people.
[1] For example, Apple used to play a sandbagging game with their guidance. After a few years most analysts caught on and if Apple didn't beat their numbers by a consistent amount, the stock would get hammered on earnings despite the fact that they beat guidance. When a company consistently sandbags (i.e. basically gives themselves an easy target to hit for the coming quarters/year), analyst estimates tend to matter more.
Is earnings guidance typically included within quarterly filings, or is it usually given on earnings calls?
Slow growth (the low end number on guidance for next quarter is 3% growth) and not making the DAU numbers support that thesis for them.
Live by the growth, die by the growth.