Snap Shares Plunges as Advertising Slump Affects Sales

Shares of the company that owns the social media platform Snapchat have fallen precipitously after it missed revenue projections and issued a warning about "incredibly challenging" circumstances. According to the company, advertisers reduced their spending due to supply chain disruptions. In New York after-hours trading, Snap shares fell by more than 25%. On worries about economic headwinds, shares in technology behemoths like Facebook owner Meta and Google's parent company Alphabet also declined.

Snap announced revenue of $1.11 billion (£926 million) for the three months ending in June after US markets closed on Thursday. This figure fell short of Wall Street expectations. The business reported that some of its advertisers had reduced their spending due to rising costs, supply chain problems, and labour shortages.

The company added that economic difficulties, changes to iPhone privacy settings, and fiercer competition for advertisers had "substantially slowed" its revenue growth. By the end of June, however, Snapchat had 347 million daily active users, exceeding expectations.

It claimed that going forward, it wants to hire fewer people, expand its advertising business, and find new revenue streams. Shares of significant technology companies that also sell online advertisements, such as Meta, Alphabet, Twitter, and Pinterest, fell in after-hours trading following the results.

Snap's earnings beat those of bigger competitors like Twitter, which will report figures later on Friday. Alphabet will release its most recent update on Tuesday, and Meta will do the same on Wednesday.