American social media company Snap, which owns the social media platform Snapchat, has stated that the company will miss its earnings and revenue estimates for the ongoing quarter.
Evan Speigel, Snap CEO, said that the fast deterioration of the ‘macroeconomic environment’ is the reason behind the negative changes, however, he also added that the team is excited about the long-term prospects.
Speigel’s internal memo to employees read, “The macroeconomic environment has deteriorated further and faster than anticipated. As a result, we believe it is likely that we will report revenue and adjusted EBITDA below the low end of our Q2 2022 guidance range. We remain excited about the long-term opportunity to grow our business. Our community continues to grow, and we continue to see strong engagement across Snapchat, and continue to see significant opportunities to grow our average revenue per user over the long term.”
The internal memo also said that the company will be slowing down the hiring process and now expect to hire 500 employees versus the 2,000 anticipated earlier.
“Like many companies, we continue to face rising inflation and interest rates, supply chain shortages and labour disruptions, platform policy changes, the impact of the war in Ukraine, and more,” the Snap CEO added in the memo.
The internal memo led to the company's shares plunging by close to 30%. The news also had an impact on the shares of other social media platforms like Meta, which fell by 7%. Twitter fell by 4%, and Pinterest fell by 12%. Google’s parent company Alphabet was off more than 3%, while The Trade Desk fell more than 8%.