(BFM Bourse) – Snap, the parent company of the social network Snapchat, has once again published results below expectations. Evoking an “unstable” economic environment, the social network generates low incomes. The title fell by nearly 30% at the opening of Wall Street, dragging down the shares of Meta (Facebook’s parent company), Twitter and even Alphabet (Google, YouTube).
Snapchat now has 363 million daily active users, up 16 million in three months, but those users are generating increasingly low revenue for the struggling social network.
The platform disappointed with revenue of $1.1 billion, up but slightly below market expectations, and net losses of $360 million, quadrupling year-on-year, partly due to the departure plan decided two months ago.
The Snap title dropped about 30% in early trading Friday on Wall Street and was already down 25% in electronic trading after the New York Stock Exchange closed Thursday night. Below $8, Snap has fallen nearly 85% since January 1 and…90% since its all-time high of September 26, 2021 at $83.34.
Shares in other social networks saw their price fall in the wake of that of Snap: Twitter fell by 5.3%, Meta (Facebook, Instagram) lost 3.5% and Alphabet (Google, YouTube) 1.3%.
An “unstable economic environment”
Revenue per user, a key indicator for social networks, stood at 3.11 dollars, its lowest level since the beginning of 2021. Evan Spiegel, the boss of the American group, insisted on the gains in terms of members, and mentioned an “unstable macroeconomic environment”.
Inflation and rising interest rates are constraining spending by advertisers, who are taking refuge on well-established platforms such as Google, YouTube, Facebook and Instagram, or adopting that of the very popular social network TikTok.
“Snap has been selling ad space for eight years, but a lot of brands still don’t understand the network and put it in their experimental budgets,” notes Jasmine Enberg of Insider Intelligence.
“It doesn’t help that Snap has aligned its future with augmented reality, which has promising long-term potential, but which remains a niche advertising format, easy to cut when budgets are tight,” he said. she adds.
A group that has never made an annual profit
The app claims it had gained users in all regions of the world, including North America and Europe, where some competitors are facing the beginning of saturation. She also points out that they spend more time on certain formats, such as “Spotlight”, a public feed of user-generated content, modeled on TikTok.
“This quarter we took action…along our three strategic priorities: growing our community and their engagement with our products, re-accelerating and diversifying our revenue growth, and investing in augmented reality,” said Evan. Spiegel, quoted in the press release.
The group, which has never generated an annual net profit, had to make a warning on the results in May, and said it was “not satisfied” in July with its results in the second quarter.
In August, Evan Spiegel announced a restructuring of the group, leading to the elimination of approximately 20% of the workforce, or more than 1,200 employees.
(With AFP)
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