Snap Inc. (SNAP) stock is down more than 30% in after-hours trading Tuesday afternoon after the company released its fourth-quarter earnings report. The report said sales rose 5% to $1.36 billion, but still fell short of expectations of $1.38 billion. Additionally, Snap posted adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) in the first quarter, which was also lower than analysts expected.
Scott Kessler, TMT (Technology, Media and Telecommunications) Third Bridge Global Sector Lead, joins Yahoo Finance to discuss Snap’s performance and what to expect from Snap going forward.
When asked how Snap stacks up against its competitors, Kessler said: “The only thing I would say about that is that historically this company has been more focused on brand advertising and performance advertising than any other company. Post-COVID, so to speak. The reason we actually had some issues in the early days of was because there was a dramatic shift to direct response advertising, which is basically associated with e-commerce, and Snap wasn’t built that way.”
He continued, “That’s not the way it’s supposed to be, and they’ve essentially spent the last year re-engineering their advertising technology and solutions to be able to sell e-commerce advertising more effectively, that kind of performance. “But because of its historical orientation.” , that really put them on the defensive, and they spent a lot of time and a lot of money essentially rebuilding the platform for those features. ”
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Editor’s note: This article was written by Nicholas Jacobino