Snap shares plunge more than 20% on weak guidance | Wilnesh News

break Shares fell more than 20% in after-hours trading Thursday after the company reported third-quarter guidance that fell short of analysts’ expectations.

Here’s what the company does:

• Earnings per share: Adjusted $0.02 per share, expected $0.02 per share, according to LSEG
• income: $1.24 billion versus expectations of $1.25 billion, according to LSEG
• Global daily active users: The number was 432 million, compared with expectations of 431.1 million, according to StreetAccount
• Global average revenue per user: Expected $2.86, expected $2.91, according to StreetAccount

Snap said third-quarter revenue will be between $1.335 billion and $1.375 billion, with $1.355 billion in the middle of that range. Analysts expected $1.36 billion. The company forecast adjusted earnings of $70 million to $100 million, below analysts’ average estimate of $110 million, according to StreetAccount.

The company said in an investor letter that it is making incremental investments in areas such as infrastructure, people and marketing, and continues to “feel the impact of increasing legal and regulatory burdens on our cost structure.”

Second-quarter sales grew 16% from $1.07 billion a year earlier. Snap said sales were impacted by a “soft advertising environment for brands in certain consumer discretionary verticals.”

Monthly active users increased to 850 million from 800 million in February.

“In the second quarter, our community grew to more than 850 million monthly active users, including more than 11 million Snapchat+ subscribers,” Snap CEO Evan Spiegel said in a statement. “We continue to expand our advertising platform, with active advertisers year over year. More than doubled.”

Snap launched its Snapchat+ subscription service in 2022 as a way to expand beyond online advertising, and said earlier this year that annualized revenue from the service would reach $249 million in 2023.

On Wednesday, Meta reported second-quarter earnings that beat analysts’ expectations and said revenue for the period, mostly from online advertising, rose 22% annually to $39.07 billion. Meta shares rose about 5% after the company reported its latest financial results and disclosed better-than-expected forecasts for the period.

Shares of Pinterest plunged this week after the company reported its latest earnings and provided third-quarter guidance that lagged analysts’ expectations. Chief Financial Officer Julia Brau Donnelly told analysts on the earnings call that Pinterest experienced “particularly weakness among food and beverage advertisers who are dealing with broader headwinds in the category.”

Last week, Alphabet announced its second-quarter earnings and said its Google advertising business grew 11% to $64.6 billion. YouTube ad sales for the quarter were $8.66 billion, below analysts’ expectations of $8.93 billion.