Snap shares plunged by more than 30 per cent after-hours trading on Tuesday after its quarterly revenue growth fell shy of Wall Street expectations, as it continues to struggle to recover from a downturn in digital advertising.
Compared with dominant, deep-pocketed rivals such as Meta, the smaller Los Angeles-based social media platform has battled to rebound from a digital advert slump that began in 2022 when tough macroeconomic conditions caused marketers to tighten their belts. It was also among the hardest hit by the privacy changes introduced by Apple in 2021, which disrupted the way brands target advertising and measure their effectiveness.
Coming a day after announcing sweeping lay-offs, Snap said its revenues increased 5 per cent to $1.36bn in the fourth quarter, below expectations of a rise to $1.38bn. This reflected “a challenging operating environment”, it said in a letter to investors.