Snap Inc. saw shares plummet in after-hours trading after reporting a loss in the latest quarter and forecasting lower first-quarter revenue.

Snap Inc. saw shares plummet in after-hours trading after reporting a loss in the latest quarter and forecasting lower first-quarter revenue. Cheddar News breaks it down.

Closing Bell

Snap Stock Tanks In After Hours After Q4 Loss

let's get to an earnings alert. This one coming from snap joining me now is she is a senior reporter. Michele Castelli. Oh Michelle the stock tanking in the after hours down 13%. What's the latest on these results Kristen yes we saw it actually down near 14% at one point. While snap did beat on earnings per share 14 cents out on an adjusted basis. They had a slight missing revenue at 1.3 billion versus the street's estimate of 1.31 billion. And that I think is what is concerning in v the idea that the advertising market, which people were already concerned about slowing is slowing even faster than people are expecting for the third straight quarter in a row snap also failed to provide any guidance for forecast. We do know that internal um cos of some analyst estimates are expecting Q. One revenue to drop 2 to 10%. And um they are expecting Q. One revenue to hit like one point oh eight billion. So it isn't really great news for this company. As we're looking at the next social media companies to report later this week. We have facebook and then of course we're gonna hear from other advertising reliant companies like alphabet coming up. One thing we really should keep an eye on is the fact that they are hitting those daily active user numbers. But if the money isn't coming in from those brand partners it doesn't mean much. So while they did beat on estimates there they still haven't found a way to monetize the new people who are coming in, you know, Michelle obviously as you've been covering and we've been following here extensively on closing bell snap is unlike the other major social media companies because a lot of its troubles do kind of seem just kind of isolated to snap. Yes, industry trends are part of it. But obviously this company about six months ahead of the other major tech layoffs that we've seen. How would you compare snaps situation to the other social media apps, of course that will be covering this week. You know, snap is unique in a sense that they're mostly a messaging apps. So a lot of the negative content that you see across different platforms, some of the concerns that people have had over instagram, they don't really have those issues that they're facing. So they were a little bit insulated from that, that being said they are facing a lot of issues that a lot of social media apps are facing. They were the first once report that Apple's privacy changes, we're going to affect their data collection processes, which affects how they can report ad tracking. So they were very negatively affected by that. On top of that, they see more competitors snap is considered more in that experimental budget, meaning that they're not necessarily a must buy for most brands, that means they're competing against companies that are very buzzy like Tiktok, even though they're facing scrutiny, they are taking more of those ad dollars, they compete against Pinterest a lot of the space. And while there is a lot of money to be had, there's a lot of different buzzy apps out there and snap has lost a little bit of that luster over the past few years now. The layoffs affecting them. They didn't mark that. There are about 20% down from about this time a year ago. It is something that is affecting all social media companies. A lot of people hired up during the pandemic and people are paring down. But with revenue missing at this point, it does seem that a lot of these tech companies are embracing for tough times ahead. You know, Michelle, another question that I have here, I'm just checking to see if we have enough time, just anything to that we can glean in terms of the outlook for the advertising space. Because one thing that we know is overall growth um does drive the stock market and advertising dollars are pretty much directly correlated to economic growth. What's the outlook that you've heard from industry insiders? Well, you know, the first thing that's usually cut in a recession, our marketing budgets. Um I did speak to few CMos and they did mention that they thought that this time was a good time to start investing, just really to bring up that brand awareness because they don't want to be left behind after the recession. But overall the consensus is tighten those budgets and unfortunately that comes a lot from the advertising space, I think this is something that the street was expecting but they weren't expecting it at this rate at the idea that they really are not getting as much as companies like snap are not getting as much revenue as people are expecting. This only spells bad news for companies like meta as you that's reporting later this week, alphabet and a lot of those big social media stocks because if the little guys are being hurt and I hate calling snap a little guy, but um if there were seeing that they're impacted, it can't look good for the bigger companies that are gonna report later. Alright, Michele Castelli a with a great breakdown as always, Michelle, thank you. Michelle joins in studio.