Snap stock fell Friday, following a second-quarter earnings report that missed estimates on top and bottom earnings as a weak advertising market hurt performance.
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Explode, Explode (Explode, Explode) late Thursday posted an adjusted loss of two cents per share on revenue of $1.11 billion. Analysts expected a 1 percent loss per share on revenue of $1.14 billion.
The Snapchat parent also declined to give guidance for the third quarter. Additionally, it said it would “significantly slow our hiring rate, as well as our operating expense growth rate.”
SNAP stock collapsed 351% to 10.70 during morning trading on stock market today.
Slowing demand for Snap’s advertising platform
“While the continued growth of our community increases long-term opportunities for our business, our second-quarter financial results do not reflect our ambition,” CEO Evan Spiegel said in written notes with Snap’s earnings statement.
Spiegel said the disappointing results were due to slowing demand for its online advertising platform.
“We are developing our business and strategy to accelerate revenue growth, including innovating our products, investing heavily in our direct response advertising business, and cultivating new revenue streams to help diversify our growth line,” he said.
Surprising earnings news pulls peers
Snap and other social media companies get about 97% of ad revenue, which has slowed in the past year.
Other social media stocks also fell. Facebook owner meta pads (dead) decreased by 5.5%. Pinterest (pins) 9.9% while Etsy (ETSY) decreased by 3.4%.
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Signs of poor advertising appeared when I reported Snap First Quarter Results On April 21, this report came with a warning, while showing a slight error in the upper and lower lines.
Surprising stock hitting challenges
Advertisers in a variety of industry groups have reported concerns regarding the overall operating environment. These concerns include continued supply chain disruptions, rising input costs, economic concerns due to rising interest rates, and concerns about geopolitical risks from the war in Ukraine.
Another big problem is that apple (AAPL) changed the tracking of ads on his operating system. Consumers gained more privacy but advertisers lost valuable user tracking data. The change has cost social media stock billions in lost revenue.
“SNAP’s comment on forward-looking advertisers’ demand amid geopolitical and supply chain conflict and inflation headwinds will be key,” Cowen analyst John Blackledge said in a note to clients ahead of Snap’s earnings report.
Please follow Brian Deagon on Twitter at Tweet embed Learn more about technology stocks, analysis and financial markets.
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