As the social networking company reckons with weaker revenue growth, snap shares fell more than 25% in extended trading on Thursday.
Evan Spiegel, the CEO, and Bobby Murphy, the head of technology, are set to stay with the company at least through January 2027 after signing new contracts.
Look at the following figures to know how the company had performed:
- The following is the earnings per share for the company: Analysts surveyed by Refinitiv expected a 1 cent loss, but the company lost 2 cents, adjusted.
- The Revenue was: the Refinitiv estimate is $1.11 billion compared to $1.14 billion.
- The Global Daily Active Users (DAUs) are: compared with 344.2 million expected, StreetAccount reports 347 million.
Snap said in its investor letter that it’s not providing guidance for the third quarter due to “forward-looking visibility remains incredibly challenging.” Revenue in the third quarter has been “approximately flat” from last year. Refinitiv analysts predicted sales growth of 18% for the third quarter.
“We are not satisfied with the results we are delivering, regardless of the current headwinds,” the company wrote in the letter.
The stock has lost almost two-thirds of its value in 2022, which is the latest chapter in a tough year for Snap. Earlier this year, Snap said it would not meet its second-quarter guidance, causing its share price to down by 43 percent. Snap stated at the time that macroeconomic conditions were deteriorating much more rapidly than expected.
Snap missed estimates despite its reduced guidance. The company’s revenue rose 13% from a year ago, whereas analysts expected a 16% increase.
“The second quarter of 2022 proved more challenging than we expected,” Snap wrote in the investor letter. According to the company, it will “substantially slow our rate of hiring, as well as the rate of operating expense growth.”
A slowing demand for Snap’s online advertising platform contributed to its disappointing results. A challenging economy, Apple’s 2021 iOS update and competition from companies like TikTok have also led marketers to trim their spending.
Even some relatively healthy businesses are curtailing their commitments due to “input cost pressure due to inflation.”
“In certain high-growth sectors, businesses are reassessing investment levels amid the rising cost of capital, which is further reflected in campaign budgets and the level of bids per action,” Snapchat said.
A $500 million stock repurchase program was also announced by Snap. Moreover, Spiegel and Murphy will each receive $1 in salary and no equity compensation for their new employment contracts.
Snap introduced Snapchat for Web this week, a desktop version of the mobile Snapchat application, allowing people to send messages and make video calls to their Snap contacts.
Snapchat launched its desktop app shortly after introducing Snapchat+, a paid subscription that lets users access early features and see who viewed their Snaps.
Investing in online advertising will soon become clearer to investors. Alphabet and Meta are due to report results next week, followed by Twitter on Friday morning.
As of Thursday afternoon, Meta and Pinterest were down 5%, while Alphabet and Twitter were down 2.9% and 1.5%, respectively.
The market cap of Snap peaked in September at $136 billion. Taking into account price changes after hours, the company is now worth $20 billion.