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Snap ‘s stock plummeted by more than 14% on Tuesday after its fourth-quarter revenue failed to meet analysts’ expectations. The company declared that its earnings per share were 14 cents, with a total of 1.30 billion dollars in revenue and 375 million global daily active users.
Snap investors face yet another letdown with the third consecutive unsatisfactory earnings report. After Snap announced its Q2 financials in October, shares dropped by 28% due to substandard revenues. The stock nosedived an even more significant 39% after its disappointing Q3 results when both income and outcomes were below expectations.
Although It Is Good Compared To The Previous Year’s Graphics, It Is Still Not Enough
In 2022, Snap endured a turbulent year with the economic recession and digital budget cuts by companies in addition to Apple’s iOS privacy update that limited targeting. In an investor letter, Snap referred to it as a “testing” period due to policy modifications and competition. However, revenue for Q4 still increased from last year despite these impediments; Meta and Twitter were facing similar struggles during this time frame.
For the entire year of 2022, Snap’s sales grew by 12% to $4.6 billion. The company stated that they do not guide for the upcoming period; however, their internal reports predict a decline between 2%-10%, contrary to analysts’ expectations of an increase in revenue.
In the letter, the company conveyed that it expects ongoing headwinds regarding revenue generation, given the past year’s performance. “On the monetization side, we predict Q1 will remain a trying climate,” they stated.
Last Year Was a Disaster for Snap Shares!
Snap suffered a horrifying 81% decrease in stock last year when the Nasdaq Composite was undergoing its harshest decline since 2008. Fortunately, January offered some reprieve as Snap’s shares rose 29%, coinciding with the revival of tech stocks throughout the market. In response to its financial woes, Snap has refocused on expanding its community engagement, launching multiple sales initiatives, and creating augmented reality solutions to strengthen its product suite further.
Executives mentioned on multiple occasions to analysts that the company’s online ad platform was designed for ease of use and to allow companies to initiate campaigns quickly. However, this same convenience also meant that brands could pause their ventures in a manner that caused significant detriment to Snap’s financial status.
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