Social media platform Snap has registered a weak second quarter, with revenue falling below expectations in the face of solid results from its biggest competitors.
Snap’s Q2 revenue of £974 million fell short of the £981 million initially forecast by analysts according to Reuters, causing share prices to plummet by as much 18% after-market.
The figure is also dwarfed by Meta’s £30.5 billion second quarter revenue, which exceeded analysts’ expectations by close to a billion pounds, causing its share price to jump 5%.
Snap has traditionally struggled to compete with its more illustrious rivals, who benefit from a larger financial backing and more established advertiser relationships.
Subscribe to Marketing Beat for free
Sign up here to get the latest marketing news sent straight to your inbox each morning
“Light Q3 guidance doesn’t help soothe their (investor) concerns. Snap faces tough competition from its much larger rival Meta, which investors rewarded for its strong ad business performance yesterday,” eMarketer principal analyst, Jasmine Enberg said.
The image-based app has however sought to harness augmented reality with heavy investments in the technology designed to entice advertisers with branded AI filters and lenses.
A potential US ban on TikTok could soon prove to be a boon for the platform however, with a large base of younger users more likely to turn to Snap than Meta.
A Snap statement added: “Brand-oriented advertising revenue declined 1% year-over-year, driven by particularly weak demand from certain consumer discretionary verticals including retail, technology, and entertainment.”