Snap stock falls nearly 25% after revenue hit by shrinking advertiser budgets

Snap on Thursday reported revenue of $1.13 billion for the three months ending in September, a slight 6% increase from the year prior and less than Wall Street had expected

In a letter to investors, Snapchat’s parent company said its revenue growth was slowed by several factors, including growing competition and jitters from the advertisers who make up its core business.

Shares of Snap fell nearly 25% in after hours trading following the earnings report.

Snap helped set off a wave of anxiety among tech investors when it warned in May that the economy had worsened faster than it expected, cutting into its revenue and profit forecast for the quarter.

Snap has also faced increasing competition from fast-growing competitors like TikTok, and is still navigating its digital ads business in the wake of privacy changes implemented by Apple that have made it more difficult for marketers to target users with ads.

There were some glimmers of hope in Snap’s report, including that the number of daily active users grew 19% year-over-year to reach 363 million in the third quarter.

Its net loss was also smaller than Wall Street had expected, but the company nonetheless lost $360 million in the quarter, compared to a loss of $72 million in the year prior.

Snap declined to provide financial guidance for the final three months of the year.

We expect that the operating environment will continue to be challenging in the months ahead and believe the actions we are taking provide a clear path forward for Snap.