Snap announced in August that will lay off 20% of employees and that it will suspend projects to cut costs and shield themselves from the deterioration of the economy.
in the third trimesterthe company registered an adjusted loss per share of 8 cents, exceeding estimates. Thus, it stands at US$10.79. When it debuted on the stock market, the shares hit a high of $17. The social network, its main product, has 300 million daily users.
What happened with Snap puts pressure on other big technology companies on Wall Street, such as Meta, Alphabet or Pinterest, which also fell in the ‘after hours’ market. Snap blame inflation of these poor results.
“Our revenue growth continued to slow in the third quarter and it continues to be affected by a number of factors that we have seen over the past year, such as changes in platform policy, macroeconomic headwinds, and increased competition“Snap noted in its letter to investors.
“We are verifying that our ad partners in many industries are cutting their marketing budgetsespecially given operating environment headwinds, inflation-driven cost pressures and rising capital costs,” they added.
Snap avoided giving targets for the fourth quarterin which it is the second consecutive period in which he has opted for do not offer a forecast.
“Future earnings visibility remains incredibly difficultand this is compounded by the fact that revenue in the fourth quarter is typically disproportionately generated in the latter half of the quarter, further reducing our visibility,” the company stated.
Snap added that Revenue growth likely to slow further in Q4as that period “has historically been more reliant on brand-oriented ad revenue,” which declined in the latest period.
Source: Ambito
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