Snap shares slid greater than 14% in prolonged buying and selling on Tuesday after the social media firm reported fourth-quarter income that trailed analysts’ estimates.
Here’s how the corporate did:
- Earnings per share: 14 cents, adjusted, versus 11 cents anticipated, based on a Refinitiv survey of analysts
- Revenue: $1.30 billion versus $1.31 billion anticipated, based on Refinitiv
- Global Daily Active Users (DAUs): 375 million versus 375.3 million anticipated, based on StreetAccount
- Average income per person: $3.47 versus $3.49 anticipated, based on StreetAccount
It’s the third disappointing earnings report in a row for Snap traders. The day after the corporate’s Q3 earnings report in October, shares fell 28% on disappointing income. The inventory misplaced 39% following its Q2 report in July after it missed on each high and backside strains.
Revenue within the fourth quarter was up barely from a yr earlier. Like social media friends Meta and Twitter, Snap had a tough 2022 as a slowing financial system led companies to slash their digital advert budgets and Apple’s iOS privateness replace restricted concentrating on capabilities.
Snapchat founder and CEO Evan Spiegel attends a session throughout the Viva Technology present in Paris on June 17, 2022.
Eric Piermont | AFP | Getty Images
In a letter to traders, Snap referred to as it a “challenging year” that was marked by “macroeconomic headwinds, platform policy changes, and increased competition.
For the full year, sales rose 12% to $4.6 billion in 2022. In its earnings statement, Snap said it wouldn’t provide guidance for the next period. However, in the investor letter the company said its “inside forecast” assumes a decline of between 2% and 10% from a year earlier. Analysts were expecting a small increase in revenue.
“On the monetization facet, we anticipate that the working surroundings will stay difficult, as we count on the headwinds we’ve confronted over the previous yr to persist all through Q1,” the company said in the letter.
It’s an ominous start to fourth-quarter earnings season for ad-supported internet companies. Investors will get a clearer picture of the state of that market later this week. Facebook parent Meta reports fourth-quarter results on Wednesday, followed by Google parent Alphabet and Amazon on Thursday.
Meta shares dropped 2% after Snap’s report. Pinterest, which releases results next week, fell almost 5%.
Snap’s stock plummeted 81% last year as the Nasdaq Composite had its worst year since 2008. The stock has recouped some of its losses, rising 29% in January, along with a broader rally in the tech sector.
The company said it’s refocusing investments to concentrate on growing its community and engagement, accelerating and diversifying its sales growth and developing augmented reality technologies.
It said its Snapchat+ service now has over 2 million paying subscribers as of the fourth quarter. Snap debuted its subscription service last summer, pitching it as a way for users to access pre-release and exclusive features for $3.99 a month.
As executives told analysts several times last year, the company’s online ad platform was built to be easy to use and to enable brands to quickly launch campaigns. But its simplicity also meant that companies could quickly pause campaigns in such a way as to severely affect Snap’s finances.
Snap announced in August it would lay off 20% of its workforce of over 6,000 employees. The company also shelved several projects during the year, including its photo-taking drone and Snap Originals premium shows.
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Source: www.cnbc.com”