Snap’s stock fell more than 30 percent in after-hours trading on Tuesday after its guidance fell short of analyst expectations even as the company reported a 5 percent increase in revenue, its second straight quarter of growth.
The Snapchat parent company released guidance for the first quarter estimating larger-than-expected losses compared with Wall Street’s expectations — prompting some analysts to suspect the company was spending more aggressively than anticipated. Last quarter, Snap declined to provide guidance because of the uncertainty surrounding the war between Israel and Hamas.
Amplifying concerns, Meta, which owns Facebook and Instagram, reported last week that its profit had more than tripled.
“This is particularly problematic for the company after Meta posted such great numbers in the same quarter, as it hints that Snap’s concerns are not macroeconomic in nature but mainly internal,” said Thomas Monteiro, a senior analyst at the financial website Investing.com.
Snap’s revenue for the three months that ended Dec. 31 was $1.36 billion, up from $1.3 billion a year earlier but below Wall Street projections of $1.38 billion. Net losses for the fourth quarter narrowed to $248 million, from $288 million a year earlier.
Evan Spiegel, the company’s chief executive, said in a letter to investors on Tuesday that “2023 was a pivotal year for Snap, as we focused relentlessly on adding value to our community while evolving our business for long-term growth.”