In the second quarter, Snap conceded a net loss of $422 million. The action of the American company collapsed by more than 25% in the exchanges following the closing of the New York Stock Exchange on the announcement of these results.
Complicated first half for Snap. In the wake of Meta, which has had a difficult last few months, Snapchat’s parent company is seeing its valuation melt like snow in the sun due to disappointing results and a pessimistic outlook. Snap’s second quarter was not immune to the current slump in the social media market, with a net loss of $422 million, despite revenue of $1.1 billion, up 13 %. “We are not happy with the results we are getting, regardless of the current headwinds”the company acknowledged in a letter to investors.
If the income of the American firm increased between April and June, its losses however widened in a spectacular way at the same time. By comparison, Snap lost $151.7 million in the same period of 2021. The gap is even greater than in the first quarter, when the Evan Spiegel-led company lost $359.6 million. dollars in losses, compared with $286.9 million a year earlier. As a reminder, Snap was in the red for the whole of 2021, with $488 million in losses.
Snapchat
Snapchat, a free application available on iOS and Android, or via an internet browser, which allows you to exchange photos and short videos, which have a limited lifespan.
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Version :
11.80.0.32 -
Downloads:
110 -
Release date :
07/20/2022 -
Author :
Snap Inc. -
Licence :
Free License -
Categories:
Hobbies – Communication
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Operating system :
Android, Online service All Internet browsers, iOS iPhone / iPad
A more difficult advertising market with the current economic climate and TikTok
After experiencing the first profitable quarter in its history in the fourth quarter of 2021, Snapchat’s parent company has failed to maintain its trajectory towards sustainable profitability. The fault in particular with an uncertain economic climate, against a backdrop of war in Ukraine and galloping inflation on a global scale which impact the budgets of advertisers.
In addition, the growth in advertising mainly benefits TikTok, the Chinese application that gives headaches to Snap, Meta and others. Proof of this is that TikTok captured two-thirds of the growth of the French digital advertising market in the first half of 2022 in the “social” segment, which until then had been the preserve of Meta (Facebook).
Wall Street ruthless with Snap since the start of the year
In this delicate context, Wall Street, which has been very strict with technology stocks since the start of the year, did not hesitate to sanction Snap when it announced its quarterly results between April and June. The action of the American company thus collapsed by more than 25% in the exchanges following the closing of the New York Stock Exchange. The California firm’s market capitalization now stands at $26.8 billion, up from its peak of $136 billion in September 2021. In 2022 alone, Snap’s stock lost nearly two-thirds of its value.
To stop the bleeding and have new sources of growth, the company notably launched a premium subscription at the end of June. Called Snapchat +, it allows, for $ 3.99 per month, to change the icon of the application, to see who has reviewed their stories and to pin one of their friends at the top of the messaging system. In addition, Snap also announced a few days ago the launch of a web version to continue its ephemeral conversations from its PC.
Nothing revolutionary, but Snap hopes with these little extra bricks to attract more users. To date, Snapchat claims 347 million daily active users, up 18% year-on-year. Analysts rather expected 344.2 million at the end of the second quarter. The American social network has therefore done better than expected, and this is one of the few good news for Snap at the moment.