Snapchat (SNAP) shares are falling over 12% in early trading Wednesday after the social media company posted weaker-than-expected revenue as digital ad sales struggled.
Snap posted fourth quarter revenue of $1.3 billion, below the $1.31 billion analysts had expected. The slowing economy and Apple’s iOS privacy update hurt digital ad sales and limited its ad targeting capabilities. Snap warned that sales in the current quarter are also likely to drop.
Snap’s net loss widened to $288 million in the fourth quarter compared to net income of $23 million a year ago. The figure was also a bigger loss than analysts had been anticipating. In a letter to investors, Snap called it a “challenging year” that was marked by “macroeconomic headwinds, platform policy changes, and increased competition.”
In late August, Snap said it would slash 20% of its workforce or more than 6,000 jobs. It warned it may suffer a period of low revenue growth well into this year.
The stock selloff also weighed on shares of Facebook parent Meta Platforms (META), which reports earnings later today. Shares of Pinterest (PINS), which reports results next week, fell almost 3% before rebounding higher.
Shares of Snap are up 14% so far this year, but down nearly 70% over the past year.