The maker of the ephemeral messaging app was growing its advertising business for a long time. Privacy changes made it harder for apps to target advertising to their users.
The business has slowed down since then.
The revenue for the third quarter was up 6 percent from a year ago. The rate of quarterly growth was the lowest in the company's history. Spending increased more than 25 percent as the net loss was $359 million, much larger than the loss from a year earlier. Revenue was expected to be around $1.12 billion.
New users continued to be added by snap. The number of daily active users increased by 19 percent. The company has seen a 17 percent increase in users in the last quarter.
Evan Spiegel said in a statement that user growth continues to expand his company's long-term opportunity.
Uncertainties related to the operating environment made it impossible for the company to predict its future performance. In a letter to investors, the company said revenue in the current quarter had increased 9 percent from a year ago, though it believed "it is highly likely that year-over-year revenue growth will decelerate" over the remainder of the quarter.
The results compounded a dismal year for the company, which has long been a smaller social media service compared with rivals. As the company dealt with the effects of Apple's privacy changes on its business, it also had to contend with worsening economic conditions, which made advertisers even more hesitant to spend.
The company that makes most of its money from ads is seeing a decline in demand. According to Jasmine Enberg, a principal analyst at Insider Intelligence, advertisers are more likely to start budget cuts with smaller companies than with larger companies.
She said that advertisers don't understand the platform.
Since the beginning of the year, the stock price of the company has plummeted.
Several of the company's executives left in August. The company laid off 20 percent of its employees and discontinued at least six products in order to save money. The position had been vacant for seven years. Mr. Spiegel said he would get the company back on track by focusing on revenue and technology.
"Unfortunately, given our current lower rate of revenue growth, it has become clear that we must reduce our cost structure to avoid incurring significant ongoing losses." These changes are needed to ensure the long term success of the business.
Even as Meta and others push into immersive digital spaces in the so-called metaverse, the company has been betting on augmented reality for growth. The company has developed software for businesses to use its augmented reality technology. The most recent version of Spectacles is only available to some creators. The glasses may not enter the mainstream for another 10 years.
There is more competition for the attention of young people from TikTok and Be Real. According to a survey by the investment bank, 38 percent of American teenagers say their favorite social media platform is TikTok. The top spot in the survey had been held bySnapchat.
Critics say that exposing young people to potentially harmful content can lead to eating disorders and contribute to other mental health issues. Teenagers can buy drugs like Fentanyl through the company's platform.
The board of the company approved a stock buy-back of up to $500 million. On Thursday, the company said that it was going to buy back the same amount.