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Snap shares tumbled more than 30 percent in after-hours trading after the company disclosed to the SEC on Monday that it expected to miss its revenue guidance for Q2.
“Since we issued guidance on April 21, 2022, the macroeconomic environment has deteriorated further and faster than anticipated,” the company said in its filing after market close. “As a result, we believe it is likely that we will report revenue and adjusted EBITDA below the low end of our Q2 2022 guidance range.”
In its Q1 earnings report, Snap — the parent company of Snapchat — hinted toward disappointing revenue expectations, given that the company did not disclose a specific revenue target for Q2, as it usually does. Instead, Snap said it expected its revenue growth to increase between 20 to 25 percent year over year. As for its Q2 Adjusted EBITDA, Snap forecasted it would break even or hit $50 million.
During the company’s Q1 earnings call in April, Derek Anderson, Snap’s chief financial officer, warned that continued supply chain disruptions, labor shortages, inflation and the ongoing war on Ukraine would negatively impact the company’s Q2 performance.
Speaking at the J.P. Morgan Global Technology, Media and Communications Conference on Monday, Snap CEO Evan Spiegel said the company would be “changing some of the pacing of [Snap’s] hiring” but said this year would continue to be a “period of significant investment for the business.”
“It’s certainly something that we’re working through along with many other business that are impacted, of course, by the supply chain issues, inflation, concerns about interest rates, the war in Ukraine, et cetera,” Spiegel said. “So there’s a lot to deal with in the macro environment today, but we’re staying focused on the long term and investing through it.”
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