Snap Shares Tank as Sales Growth Flatlines

In Snap’s financial results Thursday (July 21), the social media company recorded its weakest-ever quarterly sales growth, a report from the company said, reflecting the troubles in the digital advertising market.

The revenue for the April through June period came out to $1.11 billion, with quarterly sales growth year-over-year at 13%. Revenue just missed the scaled-back expectations of Wall Street, according to analysts surveyed by FactSet.

Shares of Snap, parent of photo-sharing app Snapchat, lost more than 25% in after-hours trading, though they had been up 5% at closing.

CEO Evan Spiegel said the quarterly results “do not reflect our ambition.”

“We are evolving our business and strategy to reaccelerate revenue growth, including innovating on our products, investing heavily in our direct response advertising business, and cultivating new sources of revenue to help diversify our topline growth,” Spiegel said in the company release.

Snap has also recently said it planned to “substantially” cut down on its rates of hiring, according to a Wall Street Journal report, which puts it in line with other companies that have had to tighten their belts, including Microsoft and Meta.

Snap said it has a number of factors working against it, including companies not spending as much on digital ads and platform changes that make it harder to deliver ads. The company said it’s also seeing more competition for ad dollars. It’s all set against the backdrop of the rising inflation, which has added to concerns about spending on ads.

With Apple’s changes to privacy policies last year, in which social media apps are now required to ask users if they want to be tracked, Snap and others have had to get more creative and look for more ways to make money.

According to Spiegel, the company has been evolving to add more sales, and will be looking for new and more diverse kinds of revenue.

Earlier this month, Snap said it would be testing a way for members to showcase NFTs on the platform, PYMNTS wrote.

See also: Snap Will Test Letting Users Showcase NFTs

This came as there have been numerous other companies looking at using digital collectibles to work with influencers.

Snap’s feature will allow NFT artists to showcase designs on Snapchat as augmented reality filters.

Snap works with developers who use the platform to design AR filters called Lenses, which can be laid over real-life images.