Lousy ad revenue
Investors send Snap plummeting
10/21/2022, 12:05 am
Current figures from the Snapchat group are driving investors to flee. After the operating company Snap reported the slowest sales growth and high losses for the past quarter, the share loses almost a quarter of its value in a first reaction.
Snapchat parent company Snap has posted its lowest revenue growth since going public five years ago, sending its stock plummeting. The photo messenger service blamed the reluctance of advertisers in view of the high inflation rate for the development on Thursday after the market closed. “We expect the operating environment to remain challenging in the coming months,” it said in a letter to investors.
For the third quarter ended September 30, revenue was $1.13 billion, up 6 percent from the same period last year. Snap announced in August that sales had increased by eight percent up to that point. According to Refinitiv data, however, experts are now expecting $1.14 billion. The US group also announced an increase in daily active users by 19 percent to 363 million. The company also announced a share buyback program of up to $500 million.
Snap pointed to increased competition for online ad spend with other services like Tiktok. Also, Snapchat is still struggling with Apple’s measures to better protect privacy on the iPhone.
Snap shares initially fell 24 percent in after-hours trading. This also dragged down other titles from tech companies, which are also heavily dependent on the advertising market and are expected to present their quarterly figures in the coming days: Pinterest fell by nine percent, Google parent Alphabet 2.6 percent and Facebook operator Meta 4.8 percent.