Snap's stock plummets more than 25 percent in after-hours U.S. trading after the company released its earnings results for the second quarter after the bell on Thursday evening.
Disclaimer - Nothing in this post is financial advise
The reason for the crash was weaker than expected revenues combined with the announcement that Snap. Inc,(Ticker: SNAP) will hire fewer employees in the future due to weakening revenue growth.
The company announced revenues of $1.11 billion in Q2 2022, up 13% year-over-year. Missing the expected revenue of $1.14 billion by only 2.6%.
Earnings by numbers:
EPS was -$0.02, beating expectations by $0.01.
Net loss was $422 million in Q2 2022, compared to $152 million in Q2 2021.
Free Cash Flow was $(147) million in Q2 2022, compared to $(116) million in Q2 2021.
Snap keeps growing its user base
In the past second quarter, the number of daily active users (DAUs) rose by 18 percent year-on-year to 347 million, thus exceeding market expectations.
The company also highlighted that the total time spent watching Spotlight content grew 59% year-over-year. The daily average number of Snapchatters aged 25 or older engaging with shows and publisher content increased by more than 40% year-over-year.
No forecast for Q3
Still, despite a forecast cut in May, the company performed weaker than feared. For the current third quarter, CEO Evan Spiegel and his team did not provide an outlook for Q3:
"Given uncertainties related to the operating environment, we are not providing our expectations for revenue or adjusted EBITDA for the third quarter of 2022"
"We are not satisfied with the results we are presenting - regardless of the current headwinds," the company wrote in its letter to shareholders.
Bottom Line
With its drop in share price after the earnings release, Snap continues its downtrend, being down a whopping 85% since its 52-week high last year. Disclaimer - Nothing in this post is financial advise
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