Los 2nd quarter results Snap-A at the close of the American stock market were not what was expected by Wall Street and the value corrected 23%, according to Daniel Howley on Yahoo Finance.
Here’s how the company performed in the quarter compared to what analysts were looking for, as compiled by Bloomberg:
- Revenue: $1.11 billion vs. $1.14 billion expected
- Adjusted EPS: -$0.02 vs. -$0.05 expected
- Daily active users: 347 million vs. 343.2 million expected
Los Snap’s average revenue per user fell 4.5% year over yearand the company said that was not providing guidance for the third trimester given the current financial climate.
“While the continued growth of our community increases the long-term opportunity for our business, our financial results for the second quarter do not reflect our ambition,” he said. CEO Evan Spiegel it’s a statement.
“We are evolving our business and strategy to re-accelerate revenue growth, including innovation in our productsinvesting heavily in our direct response advertising business and cultivating new revenue streams to help diversify our top-line growth.”
Snap’s earnings follow the company’s May announcement that would not meet its previous revenue forecast for the quarter.
“The macroeconomic environment has deteriorated faster and faster than anticipated,” the company said in a letter filed with the SEC.
Tech stocks have gutted this year, with Amazon shares down more than 25% and Meta shares down 45% till the date. But even among battered tech stocks, Snap is a dog. Stocks have a brutal drop of 65% so far this yearwhich puts them in the rare company of Netflix, which is down 63%.
It doesn’t help that Snap is dealing with an avalanche of negative news, including the Ongoing damage caused by Apple’s App Tracking Transparency, which reduces the amount of data apps can collect about users; a broader slowdown in ad space; and headwinds from COVID and the war in Ukraine.
“The lack of revenue was certainly disappointing, and I think it kind of confirmed… ad spending is slowing down,” he said. Laura Hoy, Analyst at Hargreaves Lansdowna Yahoo Finance Live.
In a bid to boost revenue, Snap announced the Snapchat+ subscription service in June. With a price of $3.99Snapchat+ promises users access to “exclusive, experimental, and pre-launch features.”
This month, the company also announced that will bring Snapchat to desktop computers. That should allow users to access their conversations without having to pull out their phones while sitting at desks.
Snap’s earnings could serve as a good indicator of the health of the digital ad market in general, and set the stage for earnings reports from the likes of Meta and Alphabet next week.
Snap-Aclosed the session with a large red candle at $11.98, still below the last bearish gap, and the location of the moving averages, the 70-period below the 200-period, would give us a bearish signal. Meanwhile, the Ei indicators are mixed.
–
