snap Equity plunged 30% in after-hours trading on Monday after CEO Evan Spiegel warned in a note to employees that the company was unable to meet its earnings and adjusted earnings targets for the quarter.
Social media companies will also delay hiring until the end of the year to control costs, Spiegel wrote.Part of the letter Submission With the Securities and Exchange Commission.
“Today we submitted 8-K and shared that the macro environment deteriorated even more rapidly than we expected when we published the quarterly guidance last month,” Spiegel wrote in a memo. “As a result, our revenues continue to grow year-over-year, but are growing slower than we expected at this time.”
April, snap Reported first quarter revenue It missed Wall Street’s expectations for sales and profits. At the time, the company said it expected revenue to increase by 20% to 25% year-on-year. Interest, taxes, depreciation and pre-amortization adjusted profits are expected to be between $ 0 and $ 50 million.
“We believe we are likely to report revenue and adjusted EBITDA below the lower bound of the guidance provided this quarter,” Spiegel wrote in a Monday update.
Spiegel said Snap will continue to hire new hires, but will slow down hiring for the rest of the year. According to notes, he still expects Snap to hire 500 new employees by the end of the year. The company has hired about 2,000 employees in the last 12 months.
According to Spiegel, Snapchat app makers are facing changes in platform policies such as rising inflation and interest rates, supply chain shortages, labor disruptions, and Apple’s iPhone privacy features. There are also the negative effects of the war in Ukraine.
“The most meaningful benefits in the coming months will be the result of increased productivity for existing team members,” Spiegel wrote.
As of Monday’s closing price, Snap’s share price has fallen by more than 50% annually, compared to a 17% drop in the S & P 500. After business hours, the share price fell 28% to $ 16.15. A fall of more than 26.6% on Tuesday would be the worst day for stocks since the company went public in 2017.