Snap Inc. Stock Takes a 15% Dive Following Q2 Revenue Shortfall
Snap Inc., the parent company of Snapchat, experienced a significant drop in its stock value, plummeting over 15% in after-hours trading on Tuesday. This decline came in the wake of a disappointing second-quarter earnings report.
The social media behemoth reported a Q2 revenue of $1.34 billion, marking a 9% increase year-over-year. However, this fell short of Wall Street’s anticipated $1.35 billion estimate. The company’s global average revenue per user (ARPU) was reported at $2.87, falling short of the analyst expectations of $2.90.
CEO Evan Spiegel attributed this underperformance to a mishandled update to the advertising platform. This error led to some campaigns clearing auctions at significantly reduced prices. The company has since reversed this change.
Despite the revenue shortfall, Snap demonstrated user growth momentum. The number of daily active users reached 469 million, showing a 9% increase year-over-year. The company’s premium service, Snapchat+, is nearing 16 million subscribers, representing a 42% year-over-year increase.
Looking ahead to Q3, Snap projects a revenue between $1.475 billion and $1.505 billion, slightly surpassing Wall Street’s estimates.
Source: CNBC