Snap (SNAP) reported disappointing Q1 earnings on Thursday, with revenue falling short of expectations and shares dropping over 20%. The company has been struggling with a decline in advertiser spending, which has hit its earnings hard. The figures were in stark contrast to rival Meta’s earnings, which beat expectations and sent shares soaring. Snap reported revenue of $988 million, compared to the expected $1 billion, and an adjusted earnings per share of $0.01, versus the expected -$0.05. The number of daily active users was in line with expectations, at 383 million, while average revenue per user was slightly lower than expected, at $2.58 versus $2.62. Snap’s CEO, Evan Spiegel, said the company is working to accelerate revenue growth and improve its advertising platform.
The company launched Snapchat+ in June 2022 as a way of diversifying and boosting its revenue streams, but the majority of its revenue still comes from advertising. Meanwhile, Meta has managed to turn its fortunes around, reporting a return to revenue growth after three quarters of declines.