ETtechSnapchat parent Snap refrained from issuing a formal guidance for second quarter of the year citing economic uncertainty as a US tariff-led trade war casts a shadow on the global economy and digital advertising budgets.
"While our topline revenue has continued to grow, we have experienced headwinds to start the current quarter, and we believe it is prudent to continue to balance our level of investment with realised revenue growth. As a result, we are updating our full year cost structure guidance to reflect our current investment plans," Snap said in it letter to investors.
The company faced challenges at the start of the June quarter as well, even as it continued to diversify both its advertiser base with small- and medium-sized businesses and its revenue sources with the growth of its subscription service, Snapchat+.
For the quarter under review, Snap's ad revenue increased 9% to year-on-year to $1.21 billion, with direct ad revenue accounting for 75% of the figure. The company is focusing on direct response ads designed to prompt specific actions like app downloads or website visits, amid weakness in brand awareness ads.
Active advertisers with Snap grew 60% in March quarter from a year ago, partly due to the company's focus on small- and medium-sized businesses.
Some analysts believe global economic uncertainty could see ad spends diverting from Snap to bigger rival Meta due to its massive user base.
Snap is not alone in expecting trouble from the current macroeconomic climate. Google parent Alphabet Inc released better than expected results last Thursday, but projected headwinds in the Asia Pacific online business as the Trump administration closed the de minimis loophole. The rule allowed small packages to be sent from the US to foreign markets without customs declarations or tariffs.
The social media company exceeded expectations on revenue in the first quarter of 2025, as the topline grew 14% to $1.3 billion, narrowly beating analysts' average estimate of $1.35 billion, according to LSEG data. Net loss more than halved to $140 million from $305 million in the corresponding period last year, while free cash flow tripled to $114 million during this period. Earnings per share saw a loss of 8 cents. Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) stood at $108.4 million, exceeding estimates of $64.7 million.
Daily active users of Snapchat increased by 9% to 460 million, beating estimates of 458.3 million. The company said its monthly active users reached 900 million, on track to achieve its target of 1 billion.
Snap trimmed its full-year forecast for adjusted operating expenses to between $2.65 billion and $2.70 billion, compared with its prior expectations of $2.70 billion to $2.75 billion.
With agencies' inputs
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The company faced challenges at the start of the June quarter as well, even as it continued to diversify both its advertiser base with small- and medium-sized businesses and its revenue sources with the growth of its subscription service, Snapchat+.
For the quarter under review, Snap's ad revenue increased 9% to year-on-year to $1.21 billion, with direct ad revenue accounting for 75% of the figure. The company is focusing on direct response ads designed to prompt specific actions like app downloads or website visits, amid weakness in brand awareness ads.
Active advertisers with Snap grew 60% in March quarter from a year ago, partly due to the company's focus on small- and medium-sized businesses.
Some analysts believe global economic uncertainty could see ad spends diverting from Snap to bigger rival Meta due to its massive user base.
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Snap is not alone in expecting trouble from the current macroeconomic climate. Google parent Alphabet Inc released better than expected results last Thursday, but projected headwinds in the Asia Pacific online business as the Trump administration closed the de minimis loophole. The rule allowed small packages to be sent from the US to foreign markets without customs declarations or tariffs.
The social media company exceeded expectations on revenue in the first quarter of 2025, as the topline grew 14% to $1.3 billion, narrowly beating analysts' average estimate of $1.35 billion, according to LSEG data. Net loss more than halved to $140 million from $305 million in the corresponding period last year, while free cash flow tripled to $114 million during this period. Earnings per share saw a loss of 8 cents. Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) stood at $108.4 million, exceeding estimates of $64.7 million.
Daily active users of Snapchat increased by 9% to 460 million, beating estimates of 458.3 million. The company said its monthly active users reached 900 million, on track to achieve its target of 1 billion.
Snap trimmed its full-year forecast for adjusted operating expenses to between $2.65 billion and $2.70 billion, compared with its prior expectations of $2.70 billion to $2.75 billion.
With agencies' inputs
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