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Snap Stock Plunges After Q4 Results| GuyWhoKnowsThings

Snap shares fell more than 30 percent in after-hours trading Tuesday after missing analyst expectations, even as the company reported a 5 percent rise in revenue, its second straight quarter of growth. .

Revenue for the three months ended Dec. 31 was $1.36 billion, up from $1.3 billion a year ago, but below Wall Street projections of $1.38 billion for Snapchat's parent company. . Net losses for the fourth quarter narrowed to $248 million, from $288 million a year earlier.

“2023 was a pivotal year for Snap as we relentlessly focused on adding value to our community while evolving our business for long-term growth,” Evan Spiegel, the company's CEO, said in a letter to investors. .

On Monday, Snap laid off more than 500 workersor about 10 percent of its global workforce, part of a larger wave of Specific cuts by technology companies. this year.

“While this decision was painful and we will miss our friends and colleagues, we believe these changes are necessary to achieve our long-term goals” and manage expenses, Spiegel said in the letter.

Despite its growth and the digital advertising market continuing to recover, Snap still faces a challenging advertising market and reports from other technology companies have been mixed. Last week, Meta reported that its profits It more than tripled and issued its first dividend. But the alphabet reported moderate growth in advertising salesand its search revenue and profit margin fell short of Wall Street's expectations.

Over the past year, Snap pivoted its business toward direct response ads, which allow customers to click to buy products. Spiegel said the change in advertising platform caused a drop in sales during the first half of the year. But, he said, it better positioned Snap's advertising business for long-term growth.

Analysts, however, have said the app may struggle to find traction with that model, as users use the app primarily to message each other and don't always see ads.

The company on Tuesday also highlighted successes with new services such as Snapchat Plus, a subscription service available from July 2022 that costs $3.99 per month and now has more than seven million paid users. And it said that Snap Star, a program for creators that began in early 2022, has attracted many content creators to the platform with the promise of earning profits from ads published alongside their public stories.

Snap's user base continued to grow. Daily active users during the fourth quarter totaled 414 million, an increase of 10 percent from a year ago. Monthly active users, which are typically reported once a year, increased 8 percent to surpass 800 million.

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