Snap shares slump after quarterly figures

Wall Street is apparently losing faith in the photo app Snapchat. Investors caused the shares of the operating company Snap to plummet by 31 percent in after-hours trading on Tuesday. Snap missed expectations with its revenue in the past quarter and startled the stock market with a surprisingly high loss forecast for the current quarter.

The Snapchat company used to grow rapidly. Now, however, the advertising dollars tend to end up with the major competitor platforms from the Facebook group Meta or Google. Meta achieved a 25 percent jump in sales in the last quarter. The share price shot up as a result.

Reduction of ten percent of the workforce

Snap CEO Evan Spiegel is trying to counteract this with cost-cutting measures. Around a fifth of jobs were cut in August 2022. On Monday, Snap announced the reduction of around ten percent of its workforce. At the end of December, the company still had just under 5,300 employees.

Snap sales increased by five percent year-on-year to 1.36 billion dollars. The bottom line was a loss of just over 248 million dollars, following a loss of 288.5 million dollars in the previous year.

For the current quarter, Snap is forecasting revenue of between 1.095 and 1.135 billion dollars. At the same time, the company expects a loss before interest, taxes, depreciation and amortization of between 55 and 95 million dollars. Analysts had rather expected 33 million. Meanwhile, the number of daily users is expected to rise from 414 million to 420 million.

Snap pointed out, among other things, that more small and medium-sized companies have recently been using the platform as advertising customers. A subscription offer with more functions now has seven million paying users. (SDA)