Oh Snap! Shares in the owner of social media platform Snapchat collapsed in after-hours trading as it posted widening losses and warned of an inflation hit to advertising spend.
The numbers themselves were reasonably resilient even if restructuring costs helped push the company into a loss.
But revenue growth is clearly slowing – to such an extent this is the slowest growth since the company floated five years ago.
AJ Bell’s Russ Mould said: “And, while its warning on advertising hit shares in other social media platform owners like Meta and Pinterest, it could be that the relevance of Snapchat with a fickle youthful user base is starting to wane.
“The emergence of TikTok and continuing popularity of Instagram means there is a significant competitive threat. Snapchat might not fade into the background soon, after all it is still adding users, but if advertisers are starting to sniff that it’s all gone a bit stale, they might start turning their noses up at using the platform to engage with consumers. Particularly given budgets are squeezed and that will force media buyers to be more selective.
“The privacy update to Apple’s operating system has, like it has to several peers, also damaged Snap’s ability to track users across the web and further weakened its online advertising business.”