Analysts were expecting sales growth of 18% for the third quarter, according to Refinitiv, but the company said that revenue so far in the period is “approximately flat.”
Shares of Snap plunged 26% after hours, and as investors await second-quarter results from companies similarly dependent on online advertising, their stocks have followed suit.
Social media companies were among the hardest hit, as Facebook parent Meta fell more than 5% and Pinterest fell nearly 7%, while Twitter dropped 2%. The Trade Desk‘s shares fell nearly 7% and Google parent Alphabet’s stock fell 3%.
Snap attributed the disappointing results to slowing demand for its ad platform, increased competition from companies like TikTok and a challenging economy.
“The second quarter of 2022 proved more challenging than we expected,” Snap said in its investor letter. The company added that it’s not providing guidance for the third quarter because “forward-looking visibility remains incredibly challenging.”
Overall, Snap’s stock has lost almost two-thirds of its value in 2022.
“We are not satisfied with the results we are delivering,” the company said in the letter.
Twitter is set to report earnings Friday morning, followed by Meta and Google next week. Analysts say they are expecting a revenue decline for Meta this quarter.