Shares of Snap (SNAP) are down nearly 30% after the social media company missed Wall
Street’s earnings expectations by a wide margin.
The Santa Monica, California-based company blamed its disappointing financial results on a
continued slump in advertising spending and rising competition. Snap is best known for the
popular Snapchat app, which has 347 million daily active users.
Snap reported that its revenue in the second quarter grew 13% to $1.11 billion U.S., which was
below the $1.14 billion U.S. expected by analysts. For the April through June period, the
company reported a net loss of $422 million U.S., which was considerably more than the $332.7
million average estimate of analysts.
Citing economic uncertainty, Snap declined to provide forward guidance for the current third
quarter.
Shares of other technology companies that are dependent on online advertising, including
Google parent company Alphabet (GOOGL) and Meta Platforms (META) also fell after Snap’s
Q2 earnings print.
Snap has said that it plans to limit hiring for the remainder of this year. The company did
announce as part of its results that its board of directors has approved a stock buyback program
of as much as $500 million U.S. over the next 12 months.
The company has introduced a number of new services and features aimed at improving its
financial performance, including Snapchat+, a subscription service that allows users to access
exclusive content and features for $3.99 U.S. a month, and the addition of voice and video
calling to desktop computers.
Snap’s stock is down 65% this year and finished trading on July 21 at $16.35 U.S. per share.