Snap shares plunge more than 17% on weak forecast
Snap shares tumbled over 17% after the company reported guidance for its current quarter that missed analysts’ expectations.
Here’s how the company did:
- Loss per share: 2 cents vs. 4 cents expected by analysts, according to Refinitiv.
- Revenue: $1.07 billion vs. $1.05 billion expected, according to Refinitiv.
- Global Daily Active Users (DAUs): 397 million vs. 394.9 million expected, according to StreetAccount.
- Average revenue per user: $2.69 vs. $2.68 expected, according to StreetAccount.
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Snap reported second-quarter results that topped analysts’ estimates but provided a weaker-than-expected forecast for the current period.
The company’s overall sales in the second quarter declined 4% from the $1.11 billion it logged in the previous year during the same period. It’s the second straight period of declining year-over-year revenue.
The social messaging business managed to narrow its net loss by 11% to $377.3 million, or 24 cents per share, in its second quarter, which ended June 30, 2023, from $422.1 million, or 26 cents, during the year-earlier period.
Snap also issued financial guidance for the third quarter that it says is “built on the assumption” that the company’s daily active users will reach between 405 million and 406 million. As part of its guidance, Snap expects between $1.07 billion and $1.13 billion in total sales for the third quarter, which it said implies “negative 5% to flat year-over-year growth.”
Analysts were projecting Snap to report third-quarter sales of $1.13 billion along with 406 million daily active users in the same period.
Last quarter, Snap did not provide official guidance for the second quarter, instead disclosing an “internal forecast” for revenue estimates in the time period.
Like many tech companies, Snap initiated a major cost-cutting plan in 2022 that included laying off 20% of the company’s overall workforce of 6,400 at the time. Because of these cuts, Snap wrote in a Tuesday letter to investors that its operating expenses shrank 8% year-over year in the second quarter, reaching $615 million. As of June 30, 2023, the company had 5,286 full-time workers, according to the letter.
“We are excited by the progress we have made delivering increased return on investment for our advertising partners, growing our community to 397 million daily active users, and reaching more than 4 million Snapchat+ subscribers,” Snap CEO Evan Spiegel said in a statement.
Snap announced its Snapchat+ subscription plan in June 2022, pitching it as a way for users to access exclusive features and updates for a monthly fee of $3.99.
Analysts are following Snap’s earnings for any signs of a recovery in the digital advertising market, which could be experiencing a modest rebound, according to several industry surveys. A recent William Blair survey, for instance, noted that while the overall online advertising market “is still soft,” the overall macro economy is “not as volatile, leading to a slow rebound in digital ad spend.”
Facebook parent Meta reports its second-quarter results on Wednesday, following the company’s first quarterly increase in revenue after three straight periods of decline. At the time, Chief Financial Officer Susan Li said the company would still be experiencing “a volatile macro environment” for the rest of the year, in addition to a “challenging regulatory environment.”
Snap executives will address analysts and investors on an earnings call beginning at 5:30 p.m. ET.
Watch: Ad revenue, cost-cutting and cloud will shape Google’s earnings
Oracle CEO Safra Catz speaks at the FII PRIORITY Summit in Miami Beach, Florida, on Feb. 20, 2025.
Joe Raedle | Getty Images
Oracle shares jumped more than 5% after a recent filing showed a cloud deal that would add over $30 billion annually.
CEO Safra Catz is slated to share the deal news at a company meeting Monday, according to a filing with the Securities and Exchange Commission. The revenues are expected to start hitting in the 2028 fiscal year.
“Oracle is off to a strong start in FY26,” Catz is expected to say, according to the filing. “Our MultiCloud database revenue continues to grow at over 100%, and we signed multiple large cloud services agreements including one that is expected to contribute more than $30 billion in annual revenue starting in FY28.”
The deals revealed Monday by Catz will not affect the company’s 2026 guidance, according to the filing.
U.S. President Donald Trump announced on April 4 that he would again postpone enforcement of a law banning TikTok unless its Chinese owner ByteDance divests from the platform.
Vcg | Visual China Group | Getty Images
U.S. President Donald Trump told Fox News in an interview aired on Sunday that he has a group of “very wealthy people” ready to buy TikTok, whose identities he can reveal in about two weeks.
Trump added that the deal will probably need Beijing’s approval to move forward, but said “I think President Xi will probably do it,” in reference to China’s leader Xi Jinping.
The president made the off-the-cuff remarks while discussing the possibility of another pause of his “reciprocal” tariffs on Fox News’ “Sunday Morning Futures with Maria Bartiromo.”
Tiktok’s fate in the U.S. has been in doubt since the approval of a law in 2024 that sought to ban the platform unless its Chinese owner, ByteDance, divested from it. The legislation was driven by concerns that the Chinese government could manipulate content and access sensitive data from American users.
Earlier this month, Trump extended the deadline for ByteDance to divest from the platform’s U.S. business. It was his third extension since the Supreme Court upheld the TikTok law just a few days before Trump’s second presidential inauguration in January. The new deadline is Sept. 17.
The Protecting Americans from Foreign Adversary Controlled Applications Act, of PAFACA, had originally been set to take effect on Jan. 19, after which app store operators and internet service providers would be penalized for supporting TikTok.
TikTok went dark in the U.S. ahead of the original deadline, but was restored after Trump provided it with assurances on the extension.
Trump, who credited the app with boosting his support among young voters in the last presidential election, has maintained that he would like to see the platform stay afloat under new ownership.
Potential buyers that have voiced interest in the app include Trump insiders such as Oracle’s Larry Ellison to firms like AppLovin and Perplexity AI.
However, it’s unclear if ByteDance would be willing to sell the company. Any potential divestiture is likely to require approval from the Chinese government.
A deal that would have spun off TikTok’s U.S. operations and allowed ByteDance to retain a minority position had been in the works in April, but was derailed by the announcement of Donald Trump’s tariffs on China, Reuters reported that month.
The president previously floated a proposal for American stakeholders to buy the company and then sell a 50% stake to the U.S. government as part of a joint venture.
Experts have previously told CNBC that any potential deal could face legal challenges in the U.S., depending on whether it complies with PAFACA.
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