By Sheila Dang
(Reuters) -Snap narrowly missed Wall Street estimates for quarterly revenue on Tuesday, as the Snapchat owner continued to struggle to compete against larger rivals for digital advertising revenue.
Shares of Snap dropped 20% in trading after the bell.
Tech giants like Facebook-owner Meta Platforms and Alphabet command more attention from advertisers due to vast amounts of data to target ads, and both have cut staff over the past year to control costs.
Snap announced on Monday it would lay off 10% of staff, or 528 employees, in order to “invest incrementally” in the company’s growth over time.
Revenue in the fourth quarter ended Dec. 31 was $1.36 billion, narrowly missing consensus analyst estimates of $1.38 billion, according to LSEG data.
The company forecast first quarter revenue between $1.1 billion to $1.14 billion. Analysts were expecting $1.1 billion.
In a letter to shareholders, Snap said it would shift more of its focus this year to growing Snapchat’s user base and investing in markets where the tech company earns the most money, including North America and Europe.
Daily active users totaled 414 million in the fourth quarter, beating analyst estimates of 411.6 million.
The Santa Monica, California-based company said it expects the number of daily users will grow to 420 million in the first quarter.
(Reporting by Sheila Dang in Austin, Editing by Franklin Paul)
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