Snap reports disappointing sales in Q2

Bloomberg

Snap Inc falls to its lowest level in more than two years after the company reported disappointing sales, roiled by a major slowdown in ad spending and rising competition for dwindling marketing dollars. Shares of Meta Platforms Inc and Alphabet Inc falls in tandem.
Second-quarter revenue grew 13% to $1.11 billion, the company said, falling short of analysts’ expectations for $1.14 billion. Snap told investors in May to disregard its initial growth guidance, which the company ultimately missed.
Advertisers are slashing budgets more than expected — a trend the company attributed to broad economic uncertainty. Snap makes the popular Snapchat app, which reached 347 million daily active users in the quarter. Its user growth outpaced rivals Facebook and Twitter and topped analysts’ estimates. But it wasn’t enough.
“The combination of macroeconomic headwinds, platform policy changes and increased competition have limited the growth of campaign budgets,” the company said in an investor letter. The results “do not reflect the scale of our ambition,” Snap added. “We are not satisfied with the results we are delivering, regardless of the current headwinds.”
Due to the economic uncertainty, the company didn’t issue financial guidance for the third quarter, except to say that — this far into the period — revenue is about flat compared with last year. In the second quarter, Snap posted a net loss of $422 million, more than the $332.7 million average estimate.
Snap shares plunged as much as 36% to $10.51 in New York on Friday morning, dragging shares of other social media companies with them. The stock had already fallen about 65% this year prior to the announcement. Snap management has told employees of plans to limit hires, and reiterated the strategy Thursday, saying it plans “a substantially reduced rate of hiring.”