Snap says it will miss its own revenue targets as the economy deteriorates faster than expected.
The social media company in April said it expected between 20% and 25% full year growth in revenue.
However, the company has wound that back, saying:.
“Since we issued guidance on April 21, 2022, the macroeconomic environment has deteriorated further and faster than anticipated.
“As a result, we believe it is likely that we will report revenue and adjusted EBITDA below the low end of our Q2 2022 guidance range.
“We remain excited about the long-term opportunity to grow our business. Our community continues to grow, and we continue to see strong engagement across Snapchat, and continue to see significant opportunities to grow our average revenue per user over the long term.”
CEO Evan Spiegel reportedly told employees in a note that he was slowing hiring.
“Our most meaningful gains over the coming months will come as a result of improved productivity from our existing team members,” Spiegel said.
He says the company faces inflation, rising interest rates, supply chain issues, the impact of Apple’s iPhone privacy moves and a negative impact from the war in Ukraine.
Snap shares are down and the news has impacted other advertising supported platforms such as Meta and Twitter.
In the March quarter, Snap reported a 38% rise in revenue to $1.063 billion. The net loss was $360 million, compared to $287 million in the prior year.
Spiegel, when releasing the results, said: “Our first quarter results reflect the underlying momentum in our business through a challenging operating environment, as we grew our community 18% year-over-year to reach 332 million, and grew our revenue 38% year-over-year to reach $1.06 billion for the quarter.
“We remain focused on providing value for our growing community, delivering ROI for our advertising partners, and investing against our enormous opportunity in augmented reality. We’re excited to share many new products and services at our annual Snap Partner Summit next week.”
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.