The scale of the struggle facing the world’s largest social media firms was laid bare today after Snapchat owner Snap Inc posted a whopping $288 million (£234 million) loss for the fourth quarter, reversing profits of $23 million it made in the previous year and sending its shares down as much as 12.6% in after-hours trading.
That brings its total losses to the year to over $1.4 billion, rounding off a difficult period for the firm which saw its share price lose about two-thirds of its value.
Snap boss Evan Spiegel said: “We continue to face significant headwinds.”
“We expect the headwinds we have faced over the past year to persist throughout Q1,” the company said.
“Given uncertainties related to the operating environment, we are not providing our expectations for revenue or adjusted EBITDA for the first quarter of 2023.”
The losses sparked concern for Snapchat’s peers, with shares in Pinterest sinking 5%, Meta falling 2.2% and Roblox shares dropping 1.4% in after-hours trade. Facebook and WhatsApp owner Meta is due to report its earnings on Thursday.
Snapchat’s revenues for the fourth quarter stood at $1.3 billion, representing growth of just 0.1% on the previous year.
Daily active users on the app increased 17% year-on-year, meaning revenue per user fell about 15% over the same period, as the firm wrestled with a downturn in demand in the advertising market, exacerbated by changes Apple made to privacy settings on its iPhones which makes it harder for third parties to gather data for targeted advertising.
It comes after the California-based tech business said it was laying off 20% of its staff in August last year in a restructuring as part of a bid to slash costs.
Snapchat CEO Evan Spiegel has a net worth of $2.9 billion, according to an estimate by Forbes.
