Snap

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There is little point trying to hawk your wares when consumers are in belt-tightening mode. Marketing budgets are the first pots of cash companies slash when times get tough. That is exactly the slowdown the Fed wants to engineer, without of course tipping the country into recession.

Snap's 40% stock price crash on Friday after a dismal second quarter earnings report and brutal call is well warranted, one analysts explained to Yahoo ...

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Shares of Snap Inc. (SNAP) plunged nearly 35% at the start of trading Friday following disappointing second quarter results, posting its weakest-ever sales.

In a statement, the company said “we are not satisfied with the results we are delivering, regardless of the current headwinds.” Snap shares are down about 65% so far this year. Snap’s board also authorized a $500 million stock buyback in the next 12 months and said it would split the stock if it reached $40 in the next 10 years.

Thank you, and good afternoon, everyone. Welcome to Snap's second quarter 2022 earnings conference call. With us today are Evan Spiegel, chief executive officer ...

Obviously, the longest -- long term, the most exciting opportunity is AR. And we're investing heavily around the future of AR to drive monetization and enterprise solutions for our AR partners, and we're very excited about that opportunity to contribute to the business over the long term. And of course, medium to long term is the Map, and we're very excited about what we're seeing there on engagement. And then the last thing that I would share just here in terms of the composition of revenue is that obviously, we've shared previously that the significant majority of our revenue is direct response related. And of course, we've got other endeavors that are earlier and are going that could provide growth, including the recently launched Snapchat+. So continuing to invest in diversifying our top-line growth to drive resiliency into our business and being well-positioned for the long term is the key. We already reached a very deep penetration in many of the world's most attractive advertising markets, but continuing to deepen our engagement and our penetration of those advertising markets and the overall global community is input one. I will take the first part and then hand it over to Derek. We saw a lot of enthusiasm at Cannes as well and a lot of really great reaction to our incredible augmented reality exhibit that we had there. And then the second one would just be as we think about moving through whatever form of downturn this is coming out on the other side, do you think that the 50% top-line growth ambition is still attainable in this kind of environment of increased competition and diluted ad performance post ATT? Is it just going to be a tougher road structurally? And putting a finer point on the three elements of how to build and scale the DR business from here, can you put some sense around how far along you are on those initiatives and the amount of investment capacity that might be needed to achieve them and/or a timetable in which to achieve them? What we have to do is stay focused on the inputs that we control, and that's around investing in our direct response business and making sure that we get improvements into our first- and third-party measurement solutions, as well as continuing to invest in improving optimization and ranking and personalization. And then in terms of what we're seeing on engagement and how that's translating to revenue, one, you're correct that the community in aggregate continues to grow at a healthy rate. And one of the reasons for that is the point I mentioned near the end there, which is, in particular, how easy it is to ramp up spending on our platform and how flexible we've made it for folks to ramp down their spending. So on the competition side in terms of monetization, we face a number of very large and very sophisticated competitors.

Snap shares were down 38.89% on July 22, following disappointing second-quarter earnings - a quarter which "proved more challenging than we expected," ...

“In a shaky macro there will be many casualties as a slower spending environment is on the horizon with darker storm clouds. “We are evolving our business and strategy to reaccelerate revenue growth, including innovating on our products, investing heavily in our direct response advertising business, and cultivating new sources of revenue to help diversify our topline growth.” Experts we’ve spoken with have told us that Snap’s focus and reliance on larger brand advertisers have made it more vulnerable to related budget cut-backs.”

Plenty of tech stock has taken massive haircuts amid a wider selloff in tech stocks, but Snap has now fallen much deeper percentage-wise than some ...

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Downbeat earnings late Thursday from social-media group Snap have sent tech stocks lower.

dropped 0.9%, while the The The stock market dropped Friday, with technology stocks getting hit the hardest after

Snap's share price was down nearly 30% in premarket trading as investors digested that earnings update. The company said in a filing with the SEC that revenue ...

Instead, the Thursday evening earnings report raised new questions about Snap's growth strategy. The company said in a filing with the SEC that revenue growth slowed to just 13%, marking a sharp deceleration compared to the prior quarter's 38% spike. That broader market rally played a role in Snap's stock price surge, and so did high expectations around its Thursday evening earnings report.

Signage for Snap Inc., parent company of Snapchat, adorns the front of the New York Stock Exchange, March 2, 2017 in New York City. Getty Images.

The company reported earnings per share of $4.96 on $8.23 billion in revenue. Analysts anticipated earnings of $3.70 per share on $14.72 billion in revenue. Seagate reported earnings per share of $1.59 on $2.63 billion in revenue. Snap — Snap plunged 39.1% after the company reported disappointing results in the second quarter. The company reported $2.57 in earnings per share on $13.40 billion of revenue in the second quarter. Analysts surveyed by Refinitiv had penciled in $2.41 per share on $12.50 billion of revenue.

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But it's important to recognize the differences in scale and perceived value Alphabet and Meta have compared to Snap and other smaller social media firms, such as Pinterest (PINS). Another key difference to keep in mind is the financial health of Alphabet and Meta, and the way investors value those companies. While JPMorgan said it anticipates expectations for Alphabet and Meta to will fall further, the analysts highlight the key differences between Alphabet and Meta. When companies need to tighten the belt, marketing budgets are one of the first places they look. That came after Alphabet repurchased roughly $13 billion worth of shares in the first quarter alone — almost approaching the entire value of Snap on Friday around $16.4 billion. Google's ad revenue rose 22.3% year over year in the first quarter to $54.66 billion. In the first quarter, Meta's ad revenue rose 6.1% year over year to roughly $27 billion. Snap's year-over-year revenue growth rate went from 38% in the first quarter to 13% in the second. We know GDP growth in the U.S. is slowing considerably — it was negative in the first quarter and could very well be in the second quarter , too. Analysts from JPMorgan summarized the situation well in a note to clients Friday, as they downgraded Snap to underweight from overweight. Its overall revenue rose 7%, the first time since the company went public a decade ago that its growth rate was in the single digits. At the most basic level, that is not great news for Alphabet and Meta. Analysts who cover the companies have been revising their revenue estimates lower for the second-quarter — and the third and fourth quarters for that matter. Of course, it's hard to quantify its specific impact, so we think it's prudent to primarily zoom in on Snap. What it means for Alphabet and Meta Simply put, Meta and Alphabet are just much bigger, more established players in the digital ad market than Snap is. Disappointing results from the parent company of Snapchat (SNAP) are weighing on other digital ad stocks Friday, but Club members should be mindful of important differences between companies in the industry.

Snap and other social media companies are facing a relentless slowdown in advertising revenue at a time when competition from other platforms, ...

“TikTok’s strong engagement and rapid monetization growth are having an outsized impact on Snap’s business,” JPMorgan analyst Doug Anmuth wrote in a note. Twitter also reported quarterly results on Friday, though Wall Street remains focused on the company’s legal battle with Tesla CEO Elon Musk, who is attempting to withdraw from a deal to buy the company. The shares have slumped nearly 80% this year, while Meta and Pinterest are down about 50%. Social media shares are facing a relentless slowdown in advertising revenue at a time when competition from other platforms, such as TikTok, is increasing. He cut his rating on the stock to underweight and slashed the price target to a Wall Street low of $9. Wall Street analysts were quick to react, with more than a dozen brokerages cutting recommendations on Snap’s stock, while many more trimmed their price targets.

An afternoon rally helped the major indexes snap their short skid. But Twitter accepting Elon Musk's bid stole the spotlight.

Investors looking for sturdier ground amid stormier days can find it in some of the more defensive sectors, such as healthcare and real estate investment trusts (REITs), which tend to be able to withstand roller-coaster markets thanks to stable growth and attractive dividend yields. He adds that other significant market moves could "be associated with commentary or language that suggests the current rate of tightening policy is either too much or not enough to break the back of inflation." As for "Musk's actions," the analyst is referring to the Tesla ( TSLA, -0.2%) CEO terminating his $44 billion buyout of Twitter, which is resulting in a court battle between the two parties. Wall Street will be watching to "see how margins are holding up in the previous stock-market darlings, and hoping they paint a prettier picture than the underperformance from U.S. banks," says Sophie Lund-Yates, equity analyst at U.K.-based financial firm Hargreaves Lansdown. " We believe VZ is currently between a rock and a hard place," says CFRA Research analyst Keith Snyder (Sell). "On the one side you have AT&T ( T), who is being extremely aggressive with promotions, and on the other, you have T-Mobile ( TMUS), who has a vastly superior 5G network currently. For starters, we're entering the busiest week of the second-quarter earnings season so far, with several mega-cap tech names – such as Apple ( AAPL) and Microsoft ( MSFT) – set to report. Additionally, the company said it will "substantially" slow hiring in order to cut costs. "We are maintaining our Buy rating on American Express following Q2 earnings, which were helped by a continued strong rebound in billed business, but hurt by a $1 billion swing in credit costs with a $410 million loss provision versus a $606 million credit loss recapture," says Argus Research analyst Stephen Biggar. The company also boosted its full-year revenue forecast. After three straight sessions of solid gains, the tech-heavy Nasdaq Composite slumped 1.9% to end at 11,843. Q2 revenue of $33.79 billion came in just above the consensus. The parent company of photo-sharing app Snapchat last night reported its weakest quarter ever for revenue growth (+13% year-over-year to $1.11 billion). SNAP also swung to a per-share loss of 2 cents from earnings of 10 cents per share in Q2 2021, while daily active users were up 18% to 347 million.

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Its digital reader revenue also relies on contributions versus an online paywall. Wall Street's response to Snap's earnings report today, despite that mid-quarter warning, shows how spooked investors are by the severity of Snap's revenue headwinds. The Guardian's revenue from digital readers has surpassed its revenue from print readers for the first time. Why it matters: It's a big milestone for the British paper that has invested in digital while maintaining a daily print product. The Guardian's digital reader revenue surpassed print for first time - Macro “headwinds” have been putting “pressure on the earnings of a wide variety of companies, and this is directly impacting the demand for advertising,” Snap CFO Derek Andersentold analystsyesterday.

(Bloomberg) -- US social-media companies saw more than $130 billion wiped off their stock-market values Friday, after disappointing revenue from Snap Inc.

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