Snap (SNAP.N), opens new tab missed estimates for quarterly revenue on Tuesday, as the Snapchat owner continued to struggle to compete against larger rivals for digital advertising revenue, sending its shares down 30%. Though its features are often copied by competitors, investors have long questioned Snap\u2019s ability to hold its own against tech giants like Facebook owner Meta Platforms (META.O), opens new tab and Alphabet (GOOGL.O), opens new tab, which have more data to target ads. Meta\u2019s advertising sales surged 25% in the December quarter. Google\u2019s ad business grew 11% as ad sales from YouTube increased 16% in the same period. Snap has failed to show that it can capitalize on a healthy advertising market that has largely remained resilient despite economic uncertainty, said Thomas Monteiro, a senior analyst at Investing.com. \u201cIt hints that Snap\u2019s concerns are not macroeconomic in nature but mainly internal,\u201d he said. During a conference call with analysts, LightShed Partners analyst Rich Greenfield questioned Snap CEO Evan Spiegel on whether the company was \u201cfundamentally disadvantaged\u201d compared to larger rivals. Spiegel said he still believed \u201cthere\u2019s enormous opportunity for us to continue to grow our business.\u201d That will involve focusing more on serving advertisers that seek to increase sales or generate website clicks from their ads, rather than simply promoting brand awareness, the company said. \u201cObviously, we wish we were moving faster, but we\u2019re working as hard as we can,\u201d Spiegel said. Revenue in the fourth quarter ended Dec. 31 was $1.36 billion, missing the consensus analyst estimate of $1.38 billion, according to LSEG data. The company\u2019s full year revenue for 2023 was $4.6 billion, unchanged from the previous year. Snap announced on Monday it would lay off 10% of staff, or 528 employees, in order to \u201cinvest incrementally\u201d in the company\u2019s growth over time. In a letter to shareholders on Tuesday, Snap said it would shift more of its focus this year to increasing Snapchat\u2019s user base and investing in markets where the tech company earns the most money, including North America and Europe. Snap\u2019s user numbers in North America were stagnant in the fourth quarter, while users in Europe grew by just 4 million compared with the previous year. Spiegel said Snap would work on \u201cresurrecting people who (previously) tried Snapchat or weren\u2019t coming into the service as often.\u201d Daily active users totaled 414 million in the fourth quarter, beating analyst estimates of 411.6 million. Most of the growth occurred in regions outside North America and Europe, which generate less advertising revenue. Snap said it expects daily active users will grow to 420 million and forecast revenue between $1.1 billion and $1.14 billion in the first quarter. Analysts were expecting $1.1 billion. Shares of Snap plunged 33% to $11.72 in after-market trading following the results and the conference call.<\/p>\n","protected":false},"excerpt":{"rendered":"
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