The tech sector rallied broadly on Thursday, with the Nasdaq ending the session up 1.4%, until Snap (SNAP) sharply dented sentiment with its quarterly results. The Snapchat owner posted its weakest-ever quarterly sales growth as a public company, with revenue that increased just 13% in Q2 (7 percentage points below the low end of its April forecast). Net losses swelled by 178% Y/Y to $422M, prompting shares to plunge 27% in extended trading, after losing nearly three-quarters of their value over the past year.
While the continued growth of our community increases the long-term opportunity for our business, our financial results for Q2 do not reflect our ambition. We are evolving our business and strategy to re-accelerate revenue growth, including innovating on our products, investing heavily in our direct response advertising business, and cultivating new sources of revenue to help diversify our top-line growth.Snap CEO Evan Spiegel
Outlook: Snap’s results come ahead of earnings from Twitter (TWTR) this morning. Other heavy hitters in the digital ad market, like Google parent Alphabet (GOOGL) and Meta Platforms (META), will report next week. That said, stock market may have another round of high volatility next week.