Why did SNAP stock drop significantly today?

3 min read | October 22, 2022 01:46 AM AEDT | By Rupam Roy

Image source: © Piter2121 | Megapixl.com

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.

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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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