Why did SNAP stock drop significantly today? - Kalkine Media

October 21, 2022 07:46 AM PDT | By Rupam Roy
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Highlights:

  • The SNAP stock went down over 30 per cent at market open on Friday, October 21.
  • Its trading volume was over 59 million at the time of writing.
  • The social media company reported its Q3 FY22 earnings results on Friday, before the opening bell.

The stock of the social media firm Snap Inc. (NYSE: SNAP) was among the top percentage losers in the morning trading hours on Friday, October 21, as seen from the notable drop in its price.

The SNAP stock went down over 30 per cent, soon after the opening bell of Wall Street on Friday, after the company announced its latest quarterly earnings results before the market opened.

Now, the downward trend of the stock has left many investors wondering about the key details of the earnings.

Let's explore its earnings details with Kalkine Media® for more insights into Snap Inc.'s recent performance:

Snap Inc Q3 FY22 earnings highlights:

The camera and social media firm, Snap Inc. primarily engages in developing and managing technology-based products and solutions. Some of its key products include Snapchat, Spectacles, Bitmoji, etc.

The NYSE-listed company reported its third quarter fiscal 2022 earnings results on Friday, which showed that it incurred a net loss of US$ 359.50 million in the quarter, down by 400 per cent from a loss of US$ 71.95 million in Q3 FY21.

According to its earnings release, the US$ 12.79 billion market cap company's revenue rose six per cent YoY to US$ 1.12 billion in Q3 FY22, from US$ 1.06 billion in the year-ago period. After the earnings report, its stock price declined in the morning hours.

In addition to that, the company also noted a growth of 19 per cent YoY in its daily active users (DAU) in the quarter. Its daily active users were 363 million in Q3 FY22.

Regarding its revenue or adjusted EBITDA guidance for the fourth quarter of fiscal 2022, the company gave no updates, citing the hovering "uncertainties" related to the operating environment.

Third quarter earnings highlights of Snap Inc. (SNAP)Source: ©Kalkine Media®; © Canva Creative Studio via Canva.com

Bottom line:

The SNAP stock was down 30.03 per cent at 9:44 am ET on Friday, October 21, and traded at US$ 7.55, while its trading volume was more than 59.21 million at that time. In the prior session, the stock of the social media firm closed at US$ 10.79.

Meanwhile, according to its earnings announcements, Snap Inc said that its board has authorized a stock repurchase program of up to US$ 500 million of its Class A common stock.

However, the repurchase could be made on a discretionary basis from time to time, the company said.


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