Snap plunges after withholding guidance amid uncertain economy

In the United States, Snap reported its first-quarter earnings on April 30, 2025, revealing a 14% year-over-year increase in revenue, totaling $1.36 billion. Despite this growth, the company chose not to provide guidance for the upcoming quarter, citing concerns over macroeconomic uncertainties that could negatively influence advertising demand. The decision not to give a revenue outlook coincided with broader fears within the tech industry about reduced advertising spending due to economic conditions. Snap's shares experienced a notable decline of over 15% following this announcement. The company's financial results indicated a narrower loss of $140 million, or 8 cents per share, compared to losses of approximately $305 million, or 19 cents per share, a year prior. Additionally, Snap reported a modest yet significant increase in daily active users, reaching 460 million, up from 453 million the previous quarter. Such user growth continues to be a positive indicator amidst a challenging advertising landscape. Investors and analysts had anticipated Snap to provide guidance for the second quarter, with expectations set at approximately $1.39 billion in revenue. However, the company's hesitance to forecast revenue suggests they are exercising caution due to potential headwinds stemming from macroeconomic challenges. Snap's leadership pointed to a dip of 3% in brand-oriented advertising revenue compared to the prior year, further highlighting the pressure on advertising demand. The wider context includes concerns among technology firms about the state of global trade, particularly in relation to evolving trade policies and recent tariff changes. Several other social media companies also faced downward shifts in their stock prices, indicating that Snap's situation is part of a broader trend across the digital advertising market. As companies navigate these uncertain waters, Snap's move to lower its full-year adjusted operating expenses range reflects a proactive approach in balancing growth investments with realized revenues. Analysts suggest that the lack of clarity in guidance may lead to further scrutiny and cautious approaches from investors moving forward.