Term profit for the second quarter of 2022

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Click shares fell more than 25% in extended trading on Thursday after the social media company reported disappointment second quarter results and said it plans to slow down hiring given weaker revenue growth.

Co-founders Evan Spiegel, CEO and CTO Bobby Murphy have agreed to new employment contracts that will keep their jobs until at least January 2027.

Here’s how the company did it:

  • Earnings per share: Adjusted loss of 2 cents compared to expected loss of 1 cent, according to Refinitiv analysts survey.
  • Income: $1.11 billion vs. $1.14 billion expected, according to Refinitiv.
  • Global Daily Active Users (DAU): 347 million vs. expected 344.2 million, according to StreetAccount.

In its letter to investors, Snap said it was not providing guidance for the third quarter because “predictability remains incredibly difficult.” The company said revenue for the period was “roughly unchanged” from a year ago. According to Refinitiv, analysts had expected sales growth of 18% in the third quarter.

“We are not satisfied with the results we are achieving despite the current obstacles,” the company said in a letter.

This is the latest chapter of a tough year for Snap, whose shares have lost nearly two-thirds of their value in 2022. In May, Snap said it would not measure plan for the second quarter, which he set the previous month, which led to 43% drop in the share price. At the time, Snap cited the macro environment as deteriorating much faster than expected.

Even with the reduced forecast, Snap still missed. Revenue increased by 13% compared to last year, while analysts had expected growth of 16%.

“The second quarter of 2022 proved to be more challenging than we expected,” the letter to investors said. The company said it now plans to “substantially slow down the rate of recruitment as well as the rate of growth in operating expenses.”

Snap attributed its disappointing results to a slowdown in demand for its online advertising platform. In addition, the complex economy Apple The 2021 iOS update and increased competition from companies like TikTok have forced marketers to cut their costs.

Snap said even some relatively healthy businesses were limiting their commitments due to “pressure on entry costs due to inflation.”

“In some fast-growing sectors, businesses are reevaluating investment levels as the cost of capital rises, further impacting campaign budgets and bids per action,” Snap said.

Snap also announced a share buyback program worth up to $500 million. And for their new employment contracts, Spiegel and Murphy will receive a $1 annual salary and no stock compensation.

Earlier this week Snap debuted Snapchat for Web, the desktop version of the Snapchat mobile app that people can use to send messages and make video calls with their Snap contacts.

Shortly thereafter, Snap introduced a new desktop app. debuted its paid Snapchat+ subscription plan, which costs $3.99 a month and allows people to access early features and see who has viewed their snaps.

Investors will soon have a clearer picture of the online advertising environment. Twitter set to report the results on Friday morning and then Alphabet as well as Meta next week.

Meta and Pinterest shares fell 5% after Thursday’s close, Alphabet shares fell 2.9% and Twitter shares fell 1.5%.

In September, Snap’s market capitalization peaked at $136 billion. Based on after-hours pricing, the company is now worth $20 billion.

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