Snap on Monday saw its shares plunge some 30% in after-hours trading after a Securities and Exchange Commission filing indicated the company’s second-quarter results will be disappointing.
“Since we issued guidance on April 21, 2022, the macroeconomic environment has deteriorated further and faster than anticipated,” the company noted in its filing.
“We believe it is likely that we will report revenue and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) below the low end of our Q2 2022 guidance range. We remain excited about the long-term opportunity to grow our business,” the company said. ”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.”
Snap stock continued dropping some 30% to $15.87 during after-hours trading on Monday. The company previously estimated its revenue growth to be between 20% to 25% year-over-year, with adjusted EBITDA somewhere breaking even to $50 million. The company did not provide new estimates in Monday’s filing.
Snap also said it will slow down hiring due to revenue declining. In a memo to staffers, CEO Evan Spiegel said that the company will hire only 500 additional employees compared to the 2,000 over the last year. In the note, he attributed the slowdown to rising inflation and interest rates, supply chain shortages, the war in Ukraine and labor disruptions — all of which are challenging tech players in recent quarters.