Snap Inc. signals. are shown on screens outside the Morgan Stanley building in New York.
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Shares of the social media and ad tech company fell in after-hours trading Thursday after Snap reported disappointing second-quarter results and plans to slow hiring.
Analysts had expected sales growth of 18% for the third quarter, according to Refinitiv, but the company said year-to-date revenue in the period is “roughly flat.”
Snap shares fell 26% after hours, and as investors await second-quarter results from companies similarly dependent on online advertising, their shares have followed suit.
Social media companies were among the hardest hit, as Facebook parent Meta fell more than 5% and Pinterest dropped nearly 7%, while Twitter fell 2%. Shares of The Trade Desk fell nearly 7% and shares of Google parent Alphabet fell 3%.
Snap attributed the disappointing results to slowing demand for its ad platform, increased competition from companies like TikTok and a challenging economy.
“The second quarter of 2022 turned out to be more challenging than we expected,” Snap said in the investor letter. The company added that it is not providing guidance for the third quarter because “forward visibility remains extremely challenging.”
Overall, Snap stock has lost almost two-thirds of its value in 2022.
“We are not satisfied with the results we are delivering,” the company said in the letter.
Twitter is set to report earnings on Friday morning, followed by Meta and Google next week. Analysts say they expect a drop in revenue for Meta this quarter.
