Snapchat’s parent company Snap loses 30% of its value after releasing its Q4 report،
Social media platform Snapchat's parent company, Snap Inc., lost more than 30% of its valuation this afternoon after reporting its fourth-quarter results.
The company reported revenue of $1.36 billion for the fourth quarter of 2023, slightly higher than the previous year's figure of $1.30 billion. But the fourth quarter's $1.38 billion gross fell short of Wall Street's expectations of $1.38 billion. And at $4.61 billion, 2023 revenue barely topped the $4.60 billion Snap generated in 2022.
In a letter to shareholders, Snap said its flat revenue in 2023 “reflects a challenging operating environment.” Just yesterday, Snap announced that it would lay off 10% of its workforce, or about 500 employees. In 2022, Snap will cut 20% of its workforce. Heavily dependent on ad revenue, Snapchat has been unable to recover from Apple's
App Tracking Transparency feature, which lets iPhone users choose whether they want to block advertisers from tracking them when they use an app.
In the letter to shareholders, Snap said it was “encouraged by the progress we are making with our advertising platform” but noted that it was facing headwinds related to the conflict in the Middle East. The violence in the region cost Snap about two percentage points of growth, according to the company. Snapchat had 414 million active daily users in the fourth quarter of 2023, up 10% year-over-year. According to the company, 800 million users worldwide visit Snapchat every month.
Half of the users are in North America and Europe, indicating that the social media platform will no longer focus on acquiring users in emerging markets that primarily use Android phones. The company noted that the number of DAU daily active users increased both sequentially and year-over-year on iOS and Android.
Snapchat is known for its often hilarious lenses
CEO Evan Spiegel wrote in the letter to shareholders: “We are increasingly focused on user growth and deepening engagement in our most highly monetizable geographies. Focusing on these initiatives will help us increase daily active usage of Snapchat, deepen content engagement, and improve performance. for advertisers, and ultimately accelerate revenue growth and generate increased free cash flow. »
Snapchat suffered a loss of $248.7 million for the fourth quarter, an improvement from the $288 million in red ink that Snap spilled during the fourth quarter of 2022. For the three months, Snap lost 15 cents per share, compared to a loss of 18 cents per share during the same quarter. quarter in 2022. For all of 2023, Snap lost $1.32 billion, a 7% improvement from the $1.43 billion it lost the year before. In 2023, the company lost 82 cents per share, 8% less than Snap's loss of 89 cents per share in 2022.
During the regular trading day, Snap shares rose 70 cents, or 4.18%, to $17.45, just off the 52-week high of $17.90. But that high now seems a long way away after the stock fell from $5.45 to $12 in after-hours trading following the report's release. This represents a drop of 31.23%.
