Snap shares plunge more than 20% on weak guidance

Snap shares plunge more than 20% on weak guidance


Evan Spiegel, co-founder and CEO of Snap Inc., during the Bloomberg Technology Summit in San Francisco on May 9, 2024.

David Paul Morris | Bloomberg | Getty Images

Snap shares fell more than 20% in extended trading on Thursday after the company reported guidance for the third quarter that trailed analysts’ estimates.

Here is how the company did:

  • Earnings per share: $0.02 adjusted vs. $0.02 per share expected, according to LSEG
  • Revenue: $1.24 billion vs. $1.25 billion expected, according to LSEG 
  • Global daily active users: 432 million vs. 431.1 million expected, according to StreetAccount
  • Global average revenue per users: $2.86 vs. $2.91 expected, according to StreetAccount

Snap said third-quarter revenue will be between $1.335 billion and $1.375 billion, or $1.355 billion in the middle of the range. Analysts were expecting $1.36 billion. The company expects adjusted earnings of $70 million to $100 million, trailing the $110 million average analyst estimate, according to StreetAccount.

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

Second-quarter sales rose 16% from $1.07 billion a year earlier. Snap said sales were affected by “a weaker brand advertising environment for certain consumer discretionary verticals.”

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

“Our community grew to reach more than 850 million monthly active users in Q2, with more than 11 million Snapchat+ subscribers,” Snap CEO Evan Spiegel said in a statement. “We continued to scale our advertising platform with active advertisers more than doubling year-over-year.”

Snap debuted its Snapchat+ subscription service in 2022 as a way to expand its business beyond online advertising and said earlier this year that the service reached an annualized revenue run rate of $249 million in 2023.

On Wednesday, Meta reported second-quarter earnings that beat analysts’ expectations and said revenue, predominately derived from online advertising, during the period rose 22% year over year to $39.07 billion. Meta shares rose about 5% after the company posted its latest financial results and disclosed a better-than-expected forecast for the current period.

Pinterest shares tumbled this week after the company reported its latest earnings and provided third-quarter guidance that trailed analysts’ estimates. Chief Financial Officer Julia Brau Donnelly told analysts during an earnings call that Pinterest experienced “softness within specifically food and beverage advertisers, who are navigating broader headwinds within that category.”

Last week, Alphabet reported second-quarter earnings and said its Google ad business grew 11% to $64.6 billion. YouTube advertising sales came in at $8.66 billion in the quarter, lower than analysts’ expectations of $8.93 billion.

Don’t miss these insights from CNBC PRO

Snap CEO Evan Spiegel: We offer social connection without social comparison



Source

Nvidia in talks with U.S. to sell a more advanced chip to China, Jensen Huang says
Technology

Nvidia in talks with U.S. to sell a more advanced chip to China, Jensen Huang says

Nvidia CEO Jensen Huang speaks to the media at a hotel in Beijing, China July 16, 2025. Alessandro Diviggiano | Reuters Nvidia is in talks with the U.S. government about shipping a new, more advanced chip to China, CEO Jensen Huang said on Friday. Earlier this week, Reuters reported the U.S. tech giant is developing […]

Read More
Nvidia’s Huang says TSMC among all-time greats: Buying its stock is ‘very smart’
Technology

Nvidia’s Huang says TSMC among all-time greats: Buying its stock is ‘very smart’

Jensen Huang, co-founder and CEO of Nvidia Corp., speaks during a news conference in Taipei on May 21, 2025. I-hwa Cheng | Afp | Getty Images Nvidia CEO Jensen Huang on Friday showered praise on Taiwan Semiconductor Manufacturing Co. on a visit to Taiwan, saying that anybody looking to take a stake in the company […]

Read More
Nvidia looking to halt H20 chip production after China cracks down on purchases, reports say
Technology

Nvidia looking to halt H20 chip production after China cracks down on purchases, reports say

An Nvidia chip is seen through a magnifying glass in Beijing, China, on August 1, 2025. Vcg | Visual China Group | Getty Images Nvidia has asked some of its component suppliers to stop production related to its made-for-China H20 general processing units, as Beijing cracks down on the American chip darling, The Information reported […]

Read More