Snapchat Stock Takes a Hit as Revenue Guidance Slips Below Expectations

In a recent update, Snap Inc.'s CEO Evan Spiegel revealed that the company is expecting to report revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) below the low end of its previously provided guidance range for this quarter. This news has sent shockwaves through the online advertising market, causing many of Snap's peers to tumble in after-hours trading.

Spiegel stated that while Snap's revenue continues to grow year-over-year, it is growing more slowly than expected at this time. The company had forecast adjusted EBITDA of between $0 and $50 million, a significant drop from its previous guidance range. This news has led many investors to reassess their expectations for the social media giant.

Outside of Snap, shares of other major advertising companies took a hit in after-hours trading. Google parent Alphabet saw its stock fall by more than 3%, while The Trade Desk dropped over 8%. Twitter fell almost 4%, and Pinterest slid 12%. Facebook parent Meta also saw its stock drop 7% in after-hours trading.

Spiegel attributed the decline in guidance to a deterioration in the macro environment, which has worsened faster than anticipated. Despite this setback, Snap is still planning to hire around 500 new employees before the end of the year, although it will slow down its pace of hiring for the remainder of the year.

The news has left investors wondering what's next for Snap and other social media companies. With a decline in guidance, many are reassessing their expectations for the company's future growth. Only time will tell how this development will impact Snap's stock and overall performance.

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Snapchat stock