Snap Shares Plunge As Q2 Earnings, Outlook Disappoint

Jill Goldsmith
2-min read

Shares of Snapchat parent Snap fell sharply after market as earnings for the June quarter fell short of Wall Street estimates.

Revenue of $1.24 billion was up 16% from the year earlier quarter but below expectations. Losses narrowed from $377 million to $249 million.

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Daily active users hit 432 million, up 9%.

“Our community grew to reach more than 850 million monthly active users in Q2, with more than 11 million Snapchat+ subscribers,” said CEO Evan Spiegel. “We continued to scale our advertising platform with active advertisers more than doubling year-over-year. We are looking forward to hosting our upcoming Snap Partner Summit on September 17th, where we will announce new updates to our service.”

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Snap is mostly ad driven, and advertising revenue rose 10%. Brand-oriented advertising revenue declined 1% year-over-year, the company said, on weak demand from certain consumer discretionary verticals including retail, technologyvand entertainment, as well as the timing impact of holidays shifting out of Q2 in the current year.

Snap shares are volatile, they surged in March after first-quarter numbers. Tech and social media June quarter earnings in general have been up and down in recent days, with YouTube parent Alphabet and Amazon also disappointing Wall Street but Meta and Apple stocks rising,

In its release, the company also offered a peek into the current quarter. “As we enter Q3,” it said, “we anticipate continued growth of our global community, and as a result, our Q3 guidance is built on the assumption that DAU will be approximately 441 million in Q3.

“We are focused on executing against our roadmap to deliver improvements to our advertising platform to drive strong performance for our advertising partners and accelerate topline growth,” it said, anticipating Q3 revenue in the $1.335 billion to $1.375 billion range implying year-over-year revenue growth of 12% to 16%.

Given that, and Snap’s investment plans, it estimated that Q3 adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) will be between $70 million and $100 million.

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