Snap (SNAP) reported third-quarter results late Thursday that missed revenue estimates but beat on earnings. Still, Snap stock plunged as analysts fretted over the weak revenue numbers.
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The social media company reported an adjusted loss of 8 cents a share on revenue of $1.13 billion. Analysts expected Snap to report a loss of 24 cents on revenue of $1.14 billion.
Snap stock collapsed 25.5% to near 8 during after-hours trading on the stock market today.
Third-quarter revenue grew 6% from the year-ago period. In a note to clients before earnings were reported, Jefferies analyst Brent Thill said revenue growth below 8% could cause investors to interpret that fundamentals are not improving.
Snap Stock: 363 Million Daily Users
Snap said it ended the quarter with 363 million daily active users.
Thill also said daily active users below 360 million could raise questions about engagement.
In August, Snap said it would lay off 20% of the company’s roughly 6,000 employees as part of a major restructuring plan.
“This quarter we took action to further focus our business on our three strategic priorities: growing our community and deepening their engagement with our products, reaccelerating and diversifying our revenue growth, and investing in augmented reality,” Snap Chief Executive Evan Spiegel said in a written statement.
In addition to the decline in Snap stock, Facebook-parent Meta Platforms (META) stock was down 4.4% after the close.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
