Snapchat founder and CEO Evan Spiegel attends a session during Viva Technology in Paris on June 17, 2022.
Eric Piermont | AFP | Getty Images
Tie up shares fell 13% in extended trading Tuesday after the social media company reported fourth-quarter revenue that missed analysts’ estimates.
Here’s how the company did it:
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- Earnings per share: $0.14 adjusted, versus $0.11 expected, according to a survey of analysts by Refinitiv
- income: $1.30 billion, versus the $1.31 billion expected, according to Refinitiv
- Global Daily Active Users (DAU): 375 million vs. 375.3 million expected, according to StreetAccount
- Average revenue per user: $3.47 versus the $3.49 expected, according to StreetAccount
Revenue in the quarter was up slightly from a year earlier. As peers in social networks Meta and Twitter, Snap endured a difficult 2022 as the slowing economy forced businesses to cut their digital advertising budgets and Apple The iOS privacy update limited the targeting capabilities.
In a letter to investors, Snap called it a “difficult” year marked by “macroeconomic headwinds, platform policy changes and increased competition.”
Full-year sales are up 12% to $4.6 billion in 2022. For the third quarter in a row, Snap said it would not provide guidance for the next period.
“On monetization, we expect the operating environment to remain challenging as we expect the headwinds we’ve faced over the past year to persist into the first quarter,” the company said in a letter.
Snap said it is refocusing investments to focus on increasing community and engagement, accelerating and diversifying sales growth and advancing augmented reality technology.
As executives told analysts several times last year, the company’s online advertising platform was designed to be easy to use and allow brands to launch campaigns quickly. But its simplicity also meant that companies could quickly suspend campaigns, severely affecting Snap’s finances.
In August, Snap announced it was laying off 20% of its workforce of more than 6,000 employees. The company also shelved several projects during the year, including a photography drone and premium show Snap Originals.
Snap shares fell 81% last year. The stock recouped some of its losses, rising 29% in January along with a broader rally in technology.
Investors will get a clearer picture of the state of the online advertising market later this week. Meta reports fourth quarter results on Wednesday and then Alphabet and Amazon on Thursday.
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