Snap shares fell after hours Thursday as shaky quarterly numbers rocked the road. Snapchat’s parent company said its net loss increased to $ 422 million in the three months ending June, from $ 152 million last year.
The changes to Apple’s platform policy last year “changed the standards of the advertising industry for more than a decade” and the macroeconomic challenges “disrupted many of the industry segments most critical to demand growth.”
our advertising solutions, “Snap said in a letter to shareholders.” We are also seeing increased competition for advertising dollars, which are now growing more slowly. Our revenue growth has slowed significantly and we are evolving our business and our strategy to adapt.
We are working to re-accelerate growth and gain shares, but we think it will be some time before we see a significant improvement. “
Adjusted EBITDA was $ 7 million, compared to $ 117 million, and free cash flow was a negative $ 147 million, compared to a negative $ 116 million.
Revenue increased 13% to $ 1.1 billion, one of the slowest quarters of growth ever for a social media platform.
Snap operates in digital advertising, which has been hit hard by the withdrawal of advertisers due to high inflation, rising interest rates and the war between Russia and Ukraine. The company also noticed stiff competition for ad dollars, with the overall ad pie growing at a slower pace.
Daily active users increased 18%, or 54 million, to 347 million both sequentially and throughout the year in North America, Europe, and the rest of the world.
“While the continued growth of our community increases the long-term opportunities of our business, our financial results in the second quarter did not reflect our ambitions,” said CEO Evan Spiegel. “We are evolving our business and strategy to accelerate revenue growth, including our product innovation, by investing heavily in our direct response advertising business and developing new revenue streams to help diversify our core growth.”
Snap declined to provide financial guidance for the current third quarter “given the uncertainties surrounding the operating environment.”
Executives will be holding a call at 5 p.m. ET to discuss the numbers.
Source: Deadline
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