Owner of Snapchat is plagued by declining sales

Date:22 July 2022 Author: Juandre

Shares of the company that owns the social media platform Snapchat have fallen precipitously after it missed sales projections and issued a warning about “extremely tough” circumstances.

According to the company, marketers reduced their spending due to supply chain problems and in New York after-hours trading, Snap shares fell by more than 25%. The Santa Monica, California-based corporation announced that in order to expand more quickly, it will considerably slow hiring, make investments in its advertising business, and discover new revenue sources to combat its waning revenue growth whilst Evan Spiegel, the CEO and Bobby Murphy, the head of technology, all agreed to new employment contracts that will keep them in their positions until at least January 2027.

Slowing demand for its online ad platform was cited by Snap as the reason for its underwhelming results. A difficult economy, Apple’s 2021 iOS release, and more competition from businesses like TikTok have all caused advertisers to cut back on their investment.

Snap stated in its investor letter that it is withholding third-quarter forecasts because “forward-looking visibility remains exceedingly tough.” According to the business, income for the time period to date is “roughly flat” from the same period last year. According to Refinitiv, analysts predicted a third-quarter sales growth of 18%.

Wondering what the actual numbers are? Here is how the business fared, according to cnbc.com.

Earnings per share: According to a Refinitiv survey of analysts, there was an actual loss of 2 cents as opposed to the anticipated loss of 1 cent.

Daily Active Users (DAUs): 347 million versus 344.2 million anticipated, according to StreetAccount

Revenue: $1.11 billion versus $1.14 billion predicted, according to Refinitiv Global

On worries about economic uncertainty, shares of technology behemoths like Facebook owner Meta and Google’s parent firm Alphabet also declined, according to bbc.com.

 

Latest Issue :

May-June 2022