Snapchat’s parent company Snap reported a second straight quarterly sales decline on Tuesday as it struggles to bring in more advertising.
The social media company reported revenue of $1.07 billion in the second quarter, down 4 percent from a year ago. In April, Snap reported a 7 percent drop in the company’s revenue from a year ago first quarter decline in sales Since it went public in 2017.
Snap reported a net loss of $377 million in the second quarter, down from a year ago but its sixth straight loss.
“Our revenue growth remains challenging,” Snap wrote in an investor letter accompanying the financial results, while acknowledging that “we are still a long way from achieving the revenue growth we aspire to.”
Snap, which is led by one of its founders, Evan Spiegel, is battling an industry-wide advertising slump brought on by the broader economic downturn. During the last year, the company laid offRe-prioritised some of its business initiatives and reorganized some of its executives to meet the challenges.
Yet while slowing ad spending has hit big tech companies like Google and Meta over the past year, Snap’s issues have been particularly difficult. As a small social media company with a limited audience, it’s not always the first stop for advertisers. and it faces stiff competition rivals like tiktokWhich has gained users more rapidly and now it is bigger than Snap.
In the investor letter, Snap said it has made changes to its advertising platform this year to increase the number of users who interact with an ad after clicking on it. But while some large advertisers were “disrupted,” the company said, the change will nevertheless drive “sustained revenue growth over time.”
To increase advertising, Snap has also tried to attract more creators with a revenue-sharing program and tested sponsored links in its artificial-intelligence-powered chatbot, My AI, where users receive ads based on their chat history with the bot. To diversify where it makes money, Snap launched a subscription service last year called Snapchat+, and it has garnered more than four million users.
Still, the company’s challenges are likely to continue. Jasmine Enberg, an analyst at Insider Intelligence, said that these new initiatives “were not yet enough to move the needle for the business.” “Until the economy improves, I don’t think the advertising business will improve,” he said.
For the current quarter, Snap forecast revenue of $1.07 billion to $1.13 billion, on par with Wall Street’s estimate of $1.13 billion.
The one bright spot for Snap was its number of users, which grew. Daily active users reached 397 million in the second quarter, up 14 percent from a year ago. The company said most of the growth came from outside the United States.