Snap Inc. had a brutal end of the week, seeing its shares dive 39% on Friday. This was a result of disappointing second-quarter earnings that saw the company miss on earnings per share (EPS) and revenue.
According to Snap’s Q2 report, the social media company recorded an adjusted loss of 2 cents compared to the expected loss of 1 cent. Furthermore, the company’s revenue came at $1.11 billion, which is 30 million less than estimated. The only mark Snap beat was global daily active users, posting 347 million versus 344.2 million expected.
“While the continued growth of our community increases the long-term opportunity for our business, our financial results for Q2 do not reflect our ambition,” said Evan Spiegel, chief executive of Snap.
Snap is a type of business that bases 97% of its revenue on advertisement, which explains why the numbers were not as good as predicted. The ads business has slowed down significantly in recent months, causing problems not only for Snap but other social media platforms like Facebook and Twitter.
Snap shares closed at $16.38 per share on Thursday, being at their highest since late May. But the stock rapidly started to fall after Q2 results were published and dropped 39.1%, all the way to $9.96.