A judgment, without a few appeals, has already come from the post-market on Wall Street: the share of the company that is behind the social Snapchat has lost something like 47 billion dollars in capitalization, giving up 27%. Now the official response will arrive with the actual reopening of the exchanges, meanwhile also Meta (Facebook), Pinterest, Alphabet (Google) and Twitter have taken note with other significant losses.
The problem is that Snap gave pretty brilliant results. Having already lost 65% since the beginning of the year, that’s not exactly a good sign. And in fact the management is running for cover. As happens in other Big Tech exponents, the first sign of concern is seen on the employees: the order has been given to slow down hiring. “Snap appears to be facing greater ad pricing pressure than expected,” says Mandeep Singh, technology analyst at BI. To weigh are both a slowdown in spending on generalized advertising, and changes in the privacy policy at Apple. But what is worrying is that “the company’s third quarter revenue outlook looks flat and therefore the headaches are not expected to go away in the near term.”
Already in the second quarter, Snapchat missed its revenue targets, due to record inflation and growing competition from rival apps like TikTok hurting demand for advertising, but it experienced user growth beyond Wall Street expectations. “We are not satisfied with the results we are achieving, regardless of the current headwinds,” Snap said in preparatory remarks prior to a conference call with analysts. Second quarter revenue stood at $ 1.11 billion. up 13% from the previous quarter. Recent iPhone privacy changes and macroeconomic challenges have helped slow revenue growth significantly.
The Santa Monica, California-based firm said it plans to significantly slow hiring, invest in its advertising business, and find new sources of income in order to grow at a faster rate. Daily active users on Snapchat increased 18% from the previous year, reaching 347 million and beating estimates of 344 million users. Investors are expecting the slowest pace of growth ever for social media advertising revenues this year, as growing competition from TikTok and Apple in advertising could exacerbate economic conditions.