Snap is experiencing a challenging quarter with significant layoffs announced after reporting lower-than-expected earnings.
Its stock plummeted by over 30% due to revenue misses and sluggish user growth. While daily active users increased slightly to 414 million, Snap struggles to attract adult users compared to Meta platforms like Facebook, Instagram, and TikTok.
Regulatory scrutiny on apps targeting children poses further challenges. Unlike Meta’s successful quarter, Snap’s revenue fell short of expectations, though earnings per share exceeded estimates. Its first-quarter forecast of 420 million daily active users and revenue growth of 11% to 15% disappointed investors seeking faster expansion.
Snap’s hardware projects, including Spectacles and Pixy drone, failed to gain traction, with Pixy even recalled due to safety concerns. Attempts to enter the enterprise market, like ARES, were short-lived.
Despite efforts to pivot to AI filters and chatbots, Snap faces stiff competition. However, its Snapchat+ subscription product shows promising growth with 7 million subscribers generating $249 million in annualized revenue.