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In May, Snap lowered financial forecasts it had issued in April.
Dreamstime
Snap
stock was sinking after the
Snap
chat parent reported slowing sales and said it wouldn’t provide forecasts for its third-quarter performance.
The company’s second-quarter loss totaled $422.1 million, or 26 cents a share. Revenue was up 13% year over year to $1.11 billion, compared to 38% year over year growth in the first quarter. Analysts polled by FactSet were expecting a loss of 22 cents a share and revenue of $1.14 billion. Adjusted earnings before interest, taxes, depreciation and amortization of $7.2 million was ahead of estimates for a loss of $4.4 million.
Snap stock was down 25% in after-hours trading.
“While the continued growth of our community increases the long-term opportunity for our business, our financial results for Q2 do not reflect the scale of our ambition,” the company wrote in an investor letter. “We are not satisfied with the results we are delivering, regardless of the current headwinds.”
Investors were watching closely to see how badly the weakening economy is affecting advertising at Snapchat, the social-media platform. Shares of Facebook’s parent Meta Platforms fell 5% in after-hours trading.
Concern that a recession is on its way and the continuing challenge of adjusting to
Apple
’s
2021 move to beef up privacy by making it harder for advertisers to track people’s actions online have weighed on Snap stock this year. The stock was already down 74% in the past 12 months.
In May, the company slashed its financial forecasts, pointing to a worsening economy. It said its adjusted earnings before interest, taxes, depreciation, and amortization would likely come in below the range of zero to $50 million management had told investors to expect in April.
The company’s quarterly conference call was set to start at 5 p.m. ET.
Corrections & amplifications: Snap will report its earnings on Thursday. The headline on an earlier version of this article incorrectly said the report will be today, Wednesday.
Write to Connor Smith at connor.smith@barrons.com