The maker of Snapchat also posted losses in the last quarter and projected that its sales would decline.
The maker of the Snapchat app posted the slowest quarterly growth rate on Tuesday and projected its sales for the current quarter to fall, in another sign of a slowdown in the tech industry.
Revenue was $1.3 billion in the fourth quarter, up 0.1% from a year earlier. The company posted a net loss of $288 million as spending increased nearly 20% over the prior year. Snap had reported its first and only quarterly profit as a public company a year ago.
In a statement to investors, the company indicated that revenues would have decreased by 7% compared to the previous year. Internal forecasts assume that revenue would fall between 2 and 10%, which would be the first drop in revenue as a public company.
Evan Spiegel, director of Snapchatpointed out that “Ad demand hasn’t really gotten better, but it hasn’t gotten significantly worse.” He had previously added a statement that Snap was continuing, “facing significant headwinds as we look to accelerate revenue growth.”
Shares of the company tumbled more than 14% in after-close trading on Tuesday. Last year, Snap’s stock price fell more than 80%.
The results show a difficult year for the company. Persistent US inflation and high interest rates have made advertisers, the company’s main source of revenue, reluctant to spend, while Apple’s privacy changes have kept social media companies from users can be tracked and retargeted in mobile advertising.
Tiktok has also obtained advertising business that was from Snap and from other platforms. Snap names the Chinese app as one of its “large and very sophisticated competitors”, who managed to reach the young public and prestigious brands.
Even so, the company hopes to continue growing with some alternatives, what is worrying is the lack of demand for the functions that they are developing at the moment.