snapmaker of messaging app Snapchat, on Tuesday posted its slowest quarterly growth yet and posted a net loss, another sign of the tech industry’s slowdown.
Revenue for the fourth quarter was $1.3 billion, up 0.1 percent year-on-year. The company’s net loss was $288 million as expenses increased nearly 20 percent year-over-year. Snap reported its first and only quarterly earnings as a public company a year ago.
Snap’s daily active users rose 17 percent to 375 million, down slightly from the 378 million Wall Street analysts had forecast.
“We continue to face significant headwinds as we attempt to accelerate revenue growth,” Snap CEO Evan Spiegel said in a statement.
The results cap a difficult year for Snap. Persistent inflation and high interest rates have left advertisers — the company’s main source of income — reluctant to spend Apple Privacy Changes have made it more difficult for social media companies to track and target users in their mobile advertising.
TikTok also stole the advertising business from Snap and other platforms. The Chinese-owned video app, which Snap has described as one of its “very large and very sophisticated competitors,” has attracted brands with its reach and cultural prestige, particularly among young people. In August, Snap laid off 20 percent of its employees, discontinued at least six products, and lost several executives.
Digital advertising has collapsed along with the world economy. But Snap is struggling more than its peers because advertisers tend to start budget cuts at smaller companies rather than juggernauts like Facebook and Instagram, said Kelsey Chickering, a senior analyst at Forrester.
“Marketers are nervous about their economic prospects,” she said. “They are shifting their budgets to places that have proven to be effective.”
Snap again declined to forecast its future performance due to “uncertainties related to the operating environment.” However, in a letter to investors, the company said that revenue for the current quarter fell 7 percent year-on-year. It added that its internal guidance for the current quarter called for revenue to fall between 2 percent and 10 percent, which would be Snap’s first revenue decline as a public company.
