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Speaking on the 2022 Q2 performance, Snap CEO Evan Spiegel said the results do not reflect the company’s ambition.
Snapchat parent company Snap Inc (NYSE: SNAP) lost nearly 27% in extended trading hours as the company missed expectations in its 2022 Q2 earnings report. The social media company released an unimpressive earnings result for its second quarter after the closing bell on 21st July. Revenue came in at $1.11 billion, lower than the earlier prediction of $1.14 billion but a 13% gain YoY. Also, adjusted earnings per share were at a loss of 2 cents, while analysts expected a loss of 1 cent. In the 2022 Q2 financial report, Snap said average revenue per user dropped 4.5% year-over-year. The social media company added that its global daily active users (DAUs) jumped 18% YoY to reach 347 million. Meanwhile, analysts had expected DAUs for the quarter to be 344.2 million.
Currently trading at $11.97 in the after-hours session, SNAP has lost more than 74% in a year. In addition, the company has declined by 65.23% since the year started and shed 44.43% in the last three months. Snap has decided to ease hiring and rate of operating expense growth to survive this challenging time.
Snap Reveals Stock Repurchase Plan in 2022 Q2 Report
Speaking on the 2022 Q2 performance, Snap CEO Evan Spiegel said the results do not reflect the company’s ambition. Spiegel revealed that the company is evolving its business and strategy to revive revenue growth. According to the CEO, Snap is working on innovation, investment, and cultivating new sources to gather revenue.
As Snap announces its 2022 Q2 financial results, the company said it is not providing guidance for the coming quarter. The multimedia service provider stated its reason to be due to “given uncertainties related to the operating environment.
Also in the 2022 Q2 earnings sheet, Snap revealed the authorization of a stock repurchase program. The company said its Board of Directors approved the program, involving up to $50 million of its Class A common stock. Currently, there are no details on the actual number of shares the company will repurchase or when the trading will occur. Instead, the company said factors like the trading volume, stock price, and market condition would determine the timing and number of shares.
Snap continued in its 2022 Q2 report that the goal of the repurchase program is to “utilize the company’s strong balance sheet to offset a portion of the dilution related to the issuance of restricted stock units to employees as part of the overall compensation program designed to foster an ownership culture.”
To fund the program, Snap will use existing cash and cash equivalents. The company revealed that it had $4.9 billion in cash and cash equivalents, restricted cash, and marketable securities as of 30th June 2022.