Snap Inc. announced it would not provide a second-quarter financial forecast amidst economic uncertainties and concerning U.S. tariffs, leading to a 9% drop in its stock. Despite challenges, the company experienced a revenue increase of 14%, driven by a focus on small business advertising and direct response ads, which now comprise 75% of ad revenue. Daily active users grew to 460 million, while total active advertisers increased by 60%. Snap trimmed its full-year operating expense guidance to align with market conditions.
Snap has refrained from issuing a second-quarter forecast due to economic uncertainty, resulting in a 9% drop in shares, amidst concerns over digital advertising budgets.
The company reported a 14% revenue increase to $1.36 billion, outperforming estimates, while its heavy focus on direct response ads accounted for 75% of ad revenue.
Daily active users of Snapchat increased 9% to 460 million, surpassing expectations, while its monthly user base reached 900 million, though the full-year operating expense forecast was trimmed.
Analysts suggest that economic challenges might push advertisers toward larger platforms like Meta, highlighting Snap's strategy to emphasize small-and medium-sized businesses for revenue diversification.
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