Snap Reports User Growth But a Wider Loss in the Second Quarter

Evan Spiegel, Snap’s chief executive, acknowledged that user growth was not enough. “While the continued growth of our community increases the long-term opportunity for our business, our financial results (for the quarter) do not reflect our ambition,” he said in a statement.

Snap has been buffeted by rising inflation, a slowing economy and industry changes that have hurt its advertising business. Last year, Apple changed its privacy settings so that users can opt out of being tracked by apps, which has made it more difficult for social media companies to do targeted advertising.

Snap has regularly forecast its financial performance for years. By declining to do so this time, the company is emulating others that have decided to say less in a period of macroeconomic uncertainty. Apple, for one, stopped providing financial guidance early in the pandemic. Twitter, which is embroiled in a legal fight with Elon Musk over his $44 billion acquisition of the company, has not been offering financial guidance, either.

Digital advertising, which composes much of Snap’s revenue, is often cut first during periods of economic challenges — and that may be compounded by the company’s younger audience, which has less spending power — said Brent Thill, an equity analyst at Jefferies.