It seems that 2022 is going to be a fertile year for memorably-downcast first sentences of shareholder letters announcing financial results.
We’ve already had Netflix’s “Our revenue growth has slowed considerably“, and now we can file Snapchat maker Snap’s “The second quarter of 2022 proved more challenging than we expected,” alongside it.
Snap’s revenues are still growing – up 13% year-on-year to $1.11bn in Q2 – but they fell short of analysts’ expectations. And, indeed, Snap’s own forecasts, although it warned investors about that in May. Snapchat did outperform expectations for user growth though: up by 18% year-on-year to 347 million daily active users.
However, its share price still suffered after yesterday’s financials, falling by more than 25% in extended trading. At its peak in September 2021, Snap’s market cap (value) was $131.41bn. Yesterday, it was $26.83bn, but that’s before the after-hours slump.
Snap’s verdict in its letter: “While the continued growth of our community increases the long term opportunity for our business, our financial results for Q2 do not reflect the scale of our ambition. We are not satisfied with the results we are delivering, regardless of the current headwinds.”