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Snap On Track For Fourth Straight Loss As Revenue Growth Slows

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Snap On Track For Fourth Straight Loss As Revenue Growth Slows

(CTN News) – Snapchat owner Snap Inc. is likely to report a fourth consecutive quarter of losses as revenue rises at the slowest rate in at least five years.

Visible Alpha estimates that Snap will report a fourth-quarter net loss of about $183 million, or adjusted earnings per share (EPS) of 10 cents, down more than half from last year.

Even though revenue is likely to reach a record $1.3 billion, that would be just 0.5% above last year. The results of Snap will be announced after the markets close on Tuesday.

As a result of a weakening economy, rampant inflation, and global instability, other social media platforms have seen their advertising revenues plummet in recent quarters.

It is likely that ad-related issues persisted through the last months of the year, as a result of last two fiscal reports.

As a result of its potential involvement in the nationwide fentanyl crisis, became a target of U.S. legislators in recent months.

At a late January congressional hearing, witnesses testified that Snap’s popular photo and texting app, known for its disappearing messages, is uniquely designed to facilitate drug transactions.

However, this attention will not affect Facebook’s fourth-quarter performance, but it may be a factor going forward.

Snap’s shares plunged early last year and have hovered around record lows since then. This has resulted in a drop of over 64% in the last 12 months, compared with a fall of 23% for the S&P 500 Communication Services Index.

Daily Active Users: Key Metric

Daily active users (DAUs) are Snap’s registered users who open the app at least once in a 24-hour period. Snap generates most of its revenue through advertising. Advertising on platform is more attractive to advertisers when its user base is larger.

In order to attract more users, Snap must also keep spending on providing more-engaging features than its competitors.

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Salman Ahmad is a seasoned writer for CTN News, bringing a wealth of experience and expertise to the platform. With a knack for concise yet impactful storytelling, he crafts articles that captivate readers and provide valuable insights. Ahmad's writing style strikes a balance between casual and professional, making complex topics accessible without compromising depth.

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