A stock exchange monitor with Snap's share price in March. Photo by Bloomberg.
The Briefing
Facebook Markets

Snap Learns Not to Guesstimate Revenue Growth

Photo: A stock exchange monitor with Snap's share price in March. Photo by Bloomberg.

Evan Spiegel certainly can’t complain that the market doesn’t listen to what he says. The Snap CEO’s warning on Monday about a worse-than-expected deterioration in second-quarter conditions brought down tech stocks across the board today, led by a 43% drop in Snap’s price. Is it heretical to suggest the market might be overreacting just a bit? It’s been evident for weeks, if not longer, that business conditions in the digital advertising market, among other sectors, are weakening. Just how weak they’ll get is the question. But Snap didn’t answer that question on Monday. Instead, the only thing we really learned is that Snap isn’t very good at forecasting.

After all, if you look at what Snap executives said on April 21, when the company gave its outlook for the second quarter, they made clear they weren’t sure how bad things would get. Derek Andersen, Snap’s chief financial officer, told analysts that at that point, a month into the quarter, revenue was growing at about 30% year over year, but “we are concerned that the operating environment ahead could be even more challenging, leading to further campaign pauses or advertiser budget reductions.” As a result, “we believe that revenue guidance of 20% to 25%…is reasonable.” Sounds like they were guessing—and they guessed wrong!

Get access to exclusive coverage
Read deeply reported stories from the largest newsroom in tech.
Latest Articles
 
The Weekend Crypto Startups
Truth or Consequences: Would You Take an AI-Powered Polygraph Test to Prove You Hadn't Cheated on a Spouse?
Truth or Consequences: Would You Take an AI-Powered Polygraph Test to Prove You Hadn't Cheated on a Spouse?
Hi, welcome to your Weekend! Even before the Supreme Court’s earth-shaking rulings this week that struck down states’ gun restrictions and ended women's right to an abortion, Americans were losing faith in the highest court in the land. On Thursday, Gallup reported that trust in the Supreme Court has never been lower, with only 25% of Americans responding that they had a great deal of...
Latest Briefs
 
Congressional Report Says Robinhood Understated Liquidity Problems During Meme Stock Craze
Zendesk Agrees to $10.2 billion Buyout Months After Rejecting Higher Bid
Meta Plans To Shut Down CrowdTangle Tool
Stay in the know
Receive a summary of the day's top tech news—distilled into one email.
Access on the go
View stories on our mobile app and tune into our weekly podcast.
Join live video Q&A’s
Deep-dive into topics like startups and autonomous vehicles with our top reporters and other executives.
Enjoy a clutter-free experience
Read without any banner ads.
Jerry Seinfeld (left) and Ted Sarandos. Photo by Getty. Art by Mike Sullivan
Exclusive Media/Telecom Amazon
A Netflix Slump Tests Sarandos’ Talent Savvy
In 2019, when comedian Mike Myers was pitching a new comedy series to Netflix, program executives at the company were skeptical.
Crypto Markets
Tech’s Worst-Timed Deals: Six Acquisitions That Have Not Improved With Age
As tech valuations collapse to a fraction of where they were last year, executives likely have a few regrets.
Amazon's logo on a tent at Cannes this week. Photo by Reuters.
Amazon
Amazon’s Ad Staffers Flee Amid Complaints of Bloat, Bureaucracy
In the years immediately before Covid-19 sidelined the global advertising festival in Cannes, Amazon kept a low-key presence at the annual gathering of ad and tech people.
Signage at VidCon 2016. Photo by Shutterstock
VidCon Returns as Chill Falls on Creator Economy
VidCon, the annual gathering of social media creators, fans and industry representatives, will descend on Anaheim, Calif., Wednesday for the first time since 2019.
Art by Clark Miller
Scene and Heard Crypto Culture
‘The Last Great Party’: With Crypto Winter Coming, NFT Lovers Try to Stave Off Reality
Ten days before NFT.NYC began last Monday in New York, I interviewed the conference’s founder, Jodee Rich, about how the crypto market’s collapse would impact this year’s gathering.
Opinion Media/Telecom
The Question Plaguing Connected TV: Who’s Watching?
PARQOR is part of The Information’s newsletter network. To receive it in your inbox every Monday, Wednesday and Friday, sign up here .