Snap dips amid dim outlook
Snap shares lost more than a fifth of their value in extended trading on Thursday, after the firm third-quarter guidance fell short
Snap shares lost more than a fifth of their value in extended trading on Thursday, after the firm third-quarter guidance fell short of analysts’ projections.
Although revenue of $1.24 billion was less than expected, it was up 16% from the same quarter last year. The $377 million in losses was reduced to $249 million. The social media firm now has 432 million daily active users, up 9%.
Most of Snap’s revenue comes from ads, it increased by 10%. According to the firm, brand-oriented advertising revenue fell 1% year over year due to the timing effect of holidays falling outside of Q2 of the current year and sluggish demand from some consumer discretionary verticals, such as retail, technology, and entertainment.
Snap, in a statement to investors, stated it will continue “to experience the impact of an increasing legal and regulatory burden on our cost structure” and that it is raising its expenses on workforce, marketing, and infrastructure.
From $1.07 billion, sales rose by 16% in the second quarter. Snap claims that revenue was harmed by “a weaker brand advertising environment for certain consumer discretionary verticals”.
CEO Evan Spiegel said, “Our community grew to reach more than 850 million monthly active users in Q2 with more than 11 million Snapchat+ subscribers.”Our advertising platform continued to expand, with the number of active advertisers surging over three times a year. We are thrilled to invite you to our next Snap Partner Summit on September 17th, where we will reveal new features to our service.
The corporation included a sneak peek at the current quarter in its release. “As Q3 approaches, we expect our global community to continue growing, so our Q3 guidance is based on the assumption that DAU will be roughly 441 million in Q3,” the statement read.
We are focused on executing against our roadmap to provide improvements to our advertising platform, which will enable us to create outstanding performance for our advertising partners and accelerate topline growth,” the statement said. Revenue for the third quarter is predicted to range from $1.335 billion to $1.375 billion, representing a 12% to 16% rise over the same period last year.
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