Snap‘s Q2 2023 earnings met Wall Street estimates, but its results weren’t strong enough to stop its stock from tumbling. The parent company of Snapchat saw its share price fall by more than 15% after it forecasted revenue losses for the third quarter of the year.
During April, May, and June, Snap reported $1.07 billion of revenue and a net loss of $377 million. Though those numbers exceeded projections, Snap’s revenue still declined by 4%. The company’s flagship app added 14 million daily active users to reach 397 million DAUs overall.
Snap is not expecting its rough seas to settle during Q3. Its Q2 earnings report included some guidance for the following three months, including a projection of flat or declining earnings. “From a revenue perspective, our business remains in a period of rapid transition as we work to improve our advertising platform, while forward visibility of advertising demand remains limited,” reads the report.
In response to that statement, Snap stock declined from 12.51 per share to 10.41 per share. It has since rebounded to approximately 10.74 per share.
Snap CEO Evan Spiegel proposed several ventures that could help Snap break out of its slump. “To return to a higher rate of revenue growth, we are focused on three key priorities,” Spiegel said. “First, investing in our products to sustain community growth and deepen engagement. Second, investing heavily in our direct-response business to deliver measurable return on spend for our advertising partners. Third, cultivating new sources of revenue to diversify our topline growth to build a more resilient business.”
The “new sources of revenue” Spiegel speaks of includes some promising products that are currently gaining millions of users within the Snapchat ecosystem. The app’s premium subscription tier, Snapchat+, followed up its strong start by reaching four million subscribers during Q2 2023. And though the ChatGPT-powered service My AI got off to a bumpy start, it is now being used by more than 150 million Snapchatters.
More details from Snap’s earnings report are available via the company’s website.
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