Snap declared a 4% drop in total sales for the second quarter compared to the $1.11 billion it earned in the same period a year prior. The firm anticipated sales in the range of $1.07 billion to $1.13 billion for the third quarter, which is less than the $1.13 billion analysts expected. Investors are observing Snap's earning reports for indicators of a potential revival in the digital advertising field, as several business surveys appear to show some improvement.
Shares of Snap plummeted by 17% following the release of the company's guidance for its current quarter, which was lower than analysts' expectations. The results were as follows: a loss per share of 2 cents compared to the 4 cents analysts predicted, according to Refinitiv; revenue of $1.07 billion, compared to the predicted $1.05 billion from Refinitiv; Global Daily Active Users (DAUs) of 397 million, compared to the expected 394.9 million, according to StreetAccount; and an Average revenue per user of $2.69, compared to the expected $2.68, also based on StreetAccount.
Revenue in the second quarter decreased 4% to $1.07 billion from the year-prior quarter's revenue of $1.11 billion; it was the second consecutive quarter with a decrease year-over-year. Net loss also decreased 11% to $377.3 million, or 24 cents per share, from the previous year of $422.1 million, or 26 cents. The company also had 5,286 full-time workers as of June 30, 2023.
Snap provided guidance for the third quarter predicting that total sales will be between $1.07 billion and $1.13 billion and that Global Daily Active Users (DAUs) will reach between 405 million and 406 million. This guidance implies negative 5% to flat year-over-year growth. StreetAccount and Refinitiv had been estimating 406 million DAUs and $1.13 billion in revenue.
Snap CEO Evan Spiegel declared in a statement that the company is pleased with the increased return on investment for their advertising partners, the growth of their community to 397 million daily active users, and now having over 4 million Snapchat+ subscribers.
Industry surveys are reporting a slight rebound in the digital advertising market. A William Blair survey stated that the overall online advertising market is still soft but the macro economy is calmer, which is resulting in a slow return of digital ad spend. Facebook parent company Meta will report its second-quarter results on Wednesday, and it will be interesting to see if they are feeling any effects from the macro economic rebound. Snap executives will conduct an earnings call at 5:30 p.m. ET.
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