What Snap's Guidance Warning Really Means
Snap (NYSE: SNAP) stock plunged 43% on Tuesday after the operator of the Snapchat messaging app surprised the market with a guidance cut.
In a filing with the Securities and Exchange Commission, the social media company said: "Since we issued guidance on April 21, 2022, the macroeconomic environment has deteriorated further and faster than anticipated. As a result, we believe it is likely that we will report revenue and adjusted EBITDA below the low end of our Q2 2022 guidance range."
A parade of tech companies has been offering bad news in recent weeks, including word of layoffs and hiring freezes. But Snap's warning may be the direst sign yet. The company only issued its second-quarter guidance a month ago, and we're barely past the halfway point of the period. It's rare to see guidance adjustments like this so early. Back in April, the company had called for second-quarter revenue growth in the range of 20% to 25%, and adjusted EBITDA in a range of zero to $50 million. Now, management says it expects top-line growth of less than 20% and an adjusted EBITDA loss.
Source Fool.com
