Snap, the parent company of social media platform Snapchat, saw its share price drop 36 percent in intraday trading on Friday after the company posted poor second-quarter results and announced plans to cut hiring. The Silicon Valley company lost nearly two-thirds of its market value in 2022.
Shares of Snap fell more than 36 percent in intraday trading on Friday after the company posted poor second-quarter results and said it plans to slow hiring as it tries to cope with weak revenue growth. Co-founders Evan Spiegel, CEO and CTO Bobby Murphy have agreed on new employment contracts that will allow them to stay in their posts until January 2027.
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CNBC reported the following financial results for the company:
- : Adjusted loss of 2 cents compared to expected loss of 1 cent, according to a Refinitiv analyst survey.
- : $1.11 billion and $1.14 billion expected, according to Refinitiv.
- : 347 million versus the expected 344.2 million, according to StreetAccount.
In a letter to investors, Snap said it would not provide guidance for the third quarter because “predictability is incredibly difficult.” The company added that its revenue for the period was “almost unchanged” from a year ago. Refinitiv noted that analysts expect sales to increase by about 18 percent, making the latest data particularly disappointing.
The company said in a letter: “We are not satisfied with the results we are delivering regardless of current headwinds.” Snap shares lost nearly two-thirds of their value in 2022. In May, Snap said it would miss its Q2 guidance set last month, causing its share price to drop 43%. As a reason for the disappointment, Snap cited the deteriorating macroeconomic environment faster than expected.
“The second quarter of 2022 was more difficult than we expected,” Snap said in a letter to investors. Snap said it now plans to “significantly slow its hiring rate and growth rate in operating expenses.”
Snap said demand for its online advertising platform has slowed, and Apple’s latest 2021 iOS update and privacy changes have resulted in lower ad revenue. The company also said that competition from companies like TikTok is driving marketers to cut back on ad spend.
Read more about CNBC here.
Source: Breitbart
