Shares of Snap (SNAP) are down 30% after the social media company reported disappointing revenue figures and issued weak forward guidance.
The company behind the Snapchat social media platform announced earnings per share (EPS) of $0.08 U.S. compared to consensus estimates of $0.06 U.S.
Revenue for the fourth and final quarter of 2023 came in at $1.36 billion U.S. versus $1.38 billion U.S. that was expected on Wall Street. Revenue rose 5% from a year earlier.
The company also reported that its number of global daily active users was 414 million in Q4, which topped the 412 million that had been expected.
Average revenue per user was $3.29 U.S. versus $3.33 U.S. that had been the consensus forecast.
Snap has struggled to recover from a downturn in the digital advertising market. This was the sixth consecutive quarter of single-digit growth or sales declines at the company.
In terms of guidance, Snap forecast sales for the current first quarter of $1.095 billion U.S. to $1.135 billion U.S., representing growth of about 11% to 15% from a year earlier.
Analysts’ average estimate for Q1 revenue was $1.117 billion U.S. or a 13% expansion.
The company also said that it expects a loss of $55 million U.S. to $95 million U.S. in Q1 of this year, which is higher than analysts’ projections for a loss of $21.9 million U.S.
In recent days, Snap announced that it would cut 10% of its global workforce, which equates to about 500 employees.
Before today’s (Feb. 7) steep drop, the stock of Snap had risen 42% in the last 12 months to trade at $17.45 U.S. per share.
