SNAP stock crashes 25% on Q3 2022 earnings release
A lackluster Q3 2022 report and indications of decreased advertiser spending has spooked investors, with SNAP stock falling 25 percent.
Snap Inc. (SNAP) shared its Q3 2022 earnings report today which shows the company missing revenue expectations despite beating EPS, as well as indications in its letter sent to investors that advertisers are spending less than they had in previous quarters.
As noted by outlets like CNBC, Snap’s Q3 2022 revenue grew just 6 percent from the previous year, marking the first time since the company’s public market debut in 2017 that revenue has seen growth in the single digits. Snap also reported a net loss of $360 million (400%) due in part to the company’s $155 million restructuring, with average revenue per user (ARPU) down as well by 11 percent from the previous quarter.
As a result of Snap’s report, SNAP stock fell a whopping 25 percent. Additionally, SNAP stock taking such a dramatic dip today has had a ripple effect, pulling GOOGL and META stock down along with it in after hours trading.
One reason why SNAP stock is tanking is due to statements in its letter to investors that center around how advertising partners are decreasing their marketing budgets amid inflation-driven cost pressures, rising costs of capital, and operating environment headwinds.
Other things of note in Snap’s Q3 2022 earnings report include the company announcing plans for a $500 million buyback of Class A shares. Snap has also stated that it won’t provide guidance for its fourth quarter, though it notes that revenue growth is likely to continue decelerating.
For more on Snap’s Q3 2022 earnings, check out the full report and read through the letter sent by Snap to its investors. And for more Snap news, be sure to read through some of our previous coverage as well on things like Snapchat (SNAP) sharing plans to to lay off 20% of its staff back in August.
Morgan Shaver posted a new article, SNAP stock crashes 25% on Q3 2022 earnings release