U.S. social networking company Snap only reported earnings a month ago but, in that time, things have gotten dramatically worse, hopes of decent growth has disappeared. The maker of the vanishing-message app Snapchat on Monday warned, lowering its earnings and revenue expectations for the June quarter, citing a rapidly slowing economy. $Snap fell to 16.10 -6.37 (-28.35%) premarket trading, the stock was down 52% YTD before this announcement.
SNAP will also slow hiring and postpone some planned staff additions until next year, according to an internal memo, while evaluating the remainder of its 2022 budget to look for cost savings. Last month when Snap reported its first-quarter earnings results, the company said it expected to grow its current-quarter revenue in a range between 20% and 25% year-over-year, while guiding to an adjusted EBITDA of between $0 and $50 million.
The latest outlook additionally smashed digital advertising stocks, including shares of Meta Platforms (FB), Pinterest (PINS) and The Trade Desk (TTD). Social Media stocks sold off on the news Meta Platforms FB +1.39% (FB) fell 7%, while Pinterest PINS –1.40% (PINS) stock dropped 13.2% and Twitter (TWTR) –1.12% (TWTR) declined 3.7%.
“The macroeconomic environment has deteriorated further and faster than anticipated,” the company said in a filing on Monday. “As a result, we believe it is likely that we will report revenue and adjusted EBITDA below the low end of our Q2 2022 guidance range.”
The world’s macro woes come after changes to iOS from Apple and supply-chain issues leading to reduced advertiser demand had already smashed the company. The company had already said it expects revenue expansion to slow due to Apple Inc.’s new policy that requires apps to ask users whether they want to be tracked.
The new rules made it difficult for advertisers to test and measure their campaigns, Snap said. The move prompted complaints from companies that use such tracking technology to sell ads, and led to a running, public fight between Apple and Facebook Inc. Snap shares plummeted around a fifth of its value on that back when it first happened which was around 70% ago for $SNAP.
From The TradersCommunity News Desk