Evan Spiegel, the CEO of the company, warned in a note to employees that the company will miss its targets for revenue and adjusted earnings in the current quarter.
The social media company will slow hiring through the end of the year as it looks to manage expenses. The letter was filed with the SEC.
The macro environment has deteriorated faster than we anticipated, and we have filed an 8-K to share that.
In April, the company reported first-quarter earnings that missed expectations. The company said it expected revenue to grow between 20% and 25%. Between $0 and $50 million was the forecast for adjusted earnings before interest, taxes, depreciation and amortization.
We believe it is now likely that we will report revenue and adjusted EBITDA below the low end of the guidance range we provided for this quarter.
The industry peers of Snap plummeted on the news. Meta's shares dropped in after-hours trading. The social networking site fell 4%, while the picture sharing site slid 12%.
The company will continue to recruit new employees, but will slow the pace of hiring for the rest of the year. He still expects to hire 500 new employees by the end of the year. Over the last year, the company hired 2,000 employees.
Inflation, interest rates, supply chain shortages, labor disruptions, and platform policy changes are some of the issues facing the maker of the Snapchat app. There is a negative impact from the war in Ukraine.
Improved productivity from our existing team members will be the most meaningful gains over the coming months.
For the year to date, the shares of the company were down over 50% compared to the S&P 500's drop. The stock dropped after hours. It would be the worst day for the stock since the company went public.
It is possible that a model change like Meta is needed.
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