Snap CEO Evan Spiegel wrote in an internal memo that the company will miss its revenue goals for this quarter. Snap will also slow its pace of hiring, a tactic that companies like Meta and Uber have employed as a way to cut costs. Though Snap continues to grow year over year, Spiegel says the company is growing more slowly than expected due to the overall economic environment.
Snap confirmed the contents of the memo to TechCrunch; the company also submitted an 8-K noting that it expects Q2 2022 revenue and adjusted EBITDA to fall below its expectations. Consistent with Spiegel’s comments on last quarter’s earnings, he wrote that Snap’s revenue has fallen short due to inflation, as well as the impact of the war in Ukraine. Snap CFO Derek Andersen previously said that after Russia’s invasion in February, many advertisers paused their campaigns, but within 10 days, most advertisers resumed them. Snap also stopped advertising in Russia, Ukraine and Belarus, noting that it won’t accept ads from entities owned by the Russian state.
Spiegel also indicated that last year’s iOS privacy change continues to affect the company. Once iOS users were presented with a choice to opt-out of off-app tracking, most users chose not to hand over more personal data to the apps they use, which impacted the ad business of social apps like Snapchat and Facebook.
“Responsibly managing our expenses will allow us to invest through this period of time and emerge stronger as a business. Moving forward, we will be taking steps to reprioritize our investments — continuing to invest across our business priorities, but in many cases doing so at a slower pace than we had planned given the operating environment,” Spiegel wrote today to employees.