CEO of Snap Inc. Evan Spiegel walks to attend a morning session at the Allen & Company Sun Valley Conference on July 7, 2021 in Sun Valley, Idaho.
Kevin Deitch | Getty Images
Explode, Explode Shares fell more than 20% in extended trading Thursday after the social media company reported weaker-than-expected third-quarter revenue. It’s the first climax on Wall Street in the current state of the faltering online advertising market.
Here are the key numbers.
- Earnings per share: 8 cents, adjusted, for a loss just shy of a small loss from the expected break-even point, according to a Refinitiv survey of analysts
- he won: $1.13 billion versus the $1.14 billion forecast, according to Refinitiv
- Global Daily Active Users (DAUs): 363 million vs. 358.2 million expected, according to StreetAccount
Snap’s third-quarter revenue grew 6% from a year earlier, the first time it had fallen to single digits since the company debuted on the public market in 2017. Meanwhile, even as the company announced a surprising adjusted earnings, its net loss soared. Snap by 400% to reach $360 million. This is partly due to a $155 million restructuring fee.
Daily active users increased by 19% year-over-year, which indicates that the company is still able to attract people to the service despite the difficulties on the business side. Average revenue per user (ARPU) decreased by 11% to $3.11.
In August, Snap announced that it would lay off 20% of the company’s 6,000 employees as part of a major restructuring plan. Separation and related costs accounted for a large portion of the restructuring fee in this period.
“This quarter, we took actions to further focus our business on our three strategic priorities: growing our community and deepening their involvement in our products, reaccelerating and diversifying our revenue growth, and investing in augmented reality,” Snap CEO Evan Spiegel said in a statement. . User growth, he said, “continues to expand our opportunity in the long term as we navigate a volatile macroeconomic environment.”
Snap also said in a letter to investors that it will not provide guidance for the second consecutive quarter.
“Visiting future revenue remains a significant challenge, and this is exacerbated by the fact that revenue in the fourth quarter is disproportionately generated in the back half of the quarter, further reducing our visibility,” the company said.
Year-over-year revenue growth is likely to slow as we move through the fourth quarter, due in large part to the fact that the fourth quarter has historically been relatively more dependent on brand-targeted advertising revenue, which has declined slightly year-over-year, the company added. in the last quarter of a year.
An apple The 2021 privacy update for iOS still presents a barrier to Snap’s ability to track users across the web, weakening its online advertising activity. Rival social media companies, most notably Facebook, have been hurt by Apple’s changes. Facebook Parent dead Quarterly reports next week.
The economic slowdown and the possibility of a recession have also led many advertisers to pause or reduce spending on their campaigns.
Snap shares have lost more than three-quarters of their value this year and are down more than 30% since July, when the company announced its second quarter. Results That missed the upper and lower lines. As in the second quarter, Snap’s board of directors authorized a share buyback program of up to $500 million. The company had $4.4 billion in cash, cash equivalents, and marketable securities as of September 30.
As part of its cost-cutting plan, Snap said during the quarter that it would shut down several expensive projects, including its Pixy drone, which it plans to sell for $230. Snap has also ended production of its Snap Originals specials.
In Thursday’s edition, Snap said that this snapchat plus subscription The service “reached more than 1.5 million paying subscribers in the third quarter and is now available in more than 170 countries.” Snap first launched the subscription service in June as a way for users to access exclusive and pre-release features for $3.99 a month.
If the stock closed on Friday at its after-hours level, it would be the lowest since early 2019.
Watch: Snap Earnings Preview