Snap loses $422 million due to decline in advertising revenue

Snapchat parent company Snap lost about $422 million in the past quarter. In the same quarter last year, that was still 151.7 million dollars. The loss is due to disappointing income from advertisements in the photo app, Snap says.

In the published quarterly figures It can be seen that Snap’s revenue for the past quarter is $1.1 billion. That’s slightly more than the year-ago quarter, which was approximately $982 million. However, the loss suffered this time is more than twice as much. “While the continued growth of the Snapchat community extends the long-term opportunities for our business, last quarter’s financial results do not reflect our ambition,” Snap CEO Evan Spiegel wrote.

Snap says some advertisers are still dealing with supply chain disruptions and labor shortages. Advertisers are also faced with rising costs due to inflation, which has led to cuts in advertising spend, according to Reuters.

To cut losses, Snap wants to work on other revenue streams than just advertising and adjust its strategy, Spiegel says. Last month, Snapchat introduced a subscription, which gives users access to “exclusive, experimental and pre-release features.” The subscription costs four dollars per month and is now only available in the United States, Canada, United Kingdom, France, Germany, Australia, New Zealand, Saudi Arabia and the United Arab Emirates.