- Snap’s third quarter 2022 revenue rose only 6% compared to a year ago to $1.13 trillion.
- Snap’s quarterly growth was the slowest ever, and sales were below market expectations.
- In after-hours trade, shares fell 27%
Snap Inc. shares fell by nearly 30% after Snap Inc. reported its slowest quarterly revenue growth.
The social media company on Thursday, reported that its revenues rose 6% from a year to $1.13 billion in the third quarter of 2022 — missing expectations of $1.14 billion, according to IBES dataRefinitiv. Its net loss increased five times to $360 millions, compared with $72 million in this same period a year earlier.
Snap informed investors that despite the app’s increase in daily users by 19% to 363,000,000 in the third quarter compared to last year, advertisers were still hesitant to spend due to the difficult macroeconomic environment.
It faces TikTok is in fierce competitionAs Lindsay Rittenhouse, Lucia Moses and Dan Whateley reported in July.
“We are finding that many of our advertising partners across industries are decreasing marketing budgets, particularly in the face operating environment headwinds. Inflation-driven cost pressures and rising capital costs,” it stated.
Users in Snap’s key market — the US — spent 5% less time viewing content in the third quarter, compared to a year ago, the company said. It also stated that Snapchatters in the US were engaging less with stories posted by friends.
Snap also declined to provide guidance for fourth quarter. Snap said that forward-looking revenue visibility is still extremely difficult.
The Santa Monica, California-based company— which said August that it was laying off 20% to 25% of its workforce — expects the operating environment to stay challenging in the months ahead. The company ExpectationsRestructuring would result in savings of $500 millions annually.
According to a transcript from the earnings call, Snap CEO Evan Spiegel stated that the restructuring would help Snap “better respond to the challenges in the current environment and to make the most progress possible as quickly as we can in the areas in our business that is able to control,” according to an earnings call.
SnapAfter closing at $10.79, Inc. shares fell 27% to $7.87 on Thursday. Snap’s market cap has fallen to $4 billion after the markets close.
The stock is down about 77% this year, so far.
