Snap shares plunge 25% on disappointing second-quarter results and plans to slow hiring

The social media company reported disappointing second-quarter results and said it plans to slow hiring as it reckons with weaker revenue growth.

Evan Spiegel, the CEO, and Bobby Murphy agreed to new employment contracts that will keep them in their jobs through at least January 2077.

The company did what it was supposed to.

• Earnings per share: A loss of 2 cents, adjusted, versus expected loss of 1 cent, according to a Refinitiv survey of analysts
• Revenue: $1.11 billion versus $1.14 billion expected, according to Refinitiv
• Global Daily Active Users (DAUs): 347 million versus 344.2 million expected, according to StreetAccount

In its investor letter, the company said it isn't giving guidance for the third quarter. Revenue is flat from a year ago, according to the company. Sales were expected to grow 18% in the third quarter.

The company stated in the letter that they are not satisfied with the results they are delivering.

It has been a rough year for the company, whose stock has lost two-thirds of its value. The share price plunged in May after the company said it wouldn't meet its guidance. The macroeconomic environment was much worse than anticipated.

The company still missed estimates even with reduced guidance. Analysts were expecting revenue to grow at a slower rate than it did.

According to the investor letter, the second quarter was more challenging than anticipated. The company said it would slow its rate of hiring and operating expense growth.

Demand for the company's online ad platform slowed. Increased competition from companies like TikTok has led marketers to pull back on their spending.

Even some relatively healthy businesses were curtailing their commitments because of inflation.

The rising cost of capital is prompting businesses in certain high-growth sectors to rethink investment levels.

The company announced a stock repurchasing program. Spiegel and Murphy will not be paid equity compensation for their new employment contracts.

The desktop version of the mobile app that people can use to send messages and make video calls with their friends was launched by the company.

The new desktop app was revealed shortly after the launch of the paid subscription plan for the ephemeral messaging service.

The online ad environment will soon be clear to investors. Next week, results will be reported by both Meta andAlphabet.

In after-hours trading on Thursday, the shares of Meta andPinterest fell, as did the shares of the other two companies.

The market cap of the company peaked in September. The company is now worth 20 billion dollars.

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