By Sheila Dang
(Reuters) -Snap missed Wall Street estimates for quarterly revenue on Tuesday as the Snapchat owner continued to struggle to compete with bigger rivals for digital ad revenue, sending its shares down 30%.
While its features are often copied by competitors, investors have long questioned Snap’s ability to hold its own against tech giants like Facebook-owned Meta Platforms and Alphabet, which have more data to target ads.
Meta’s advertising revenue rose 25% in the December quarter. Google’s advertising business grew 11%, while YouTube’s ad sales rose 16% over the same period.
Snap has failed to demonstrate that it can benefit from a healthy advertising market that has remained largely resilient despite economic uncertainty, said Thomas Monteiro, a senior analyst at Investing.com.
“It indicates that Snap’s concerns are not macroeconomic in nature, but primarily internal,” he said.
Revenue in the fourth quarter ended Dec. 31 was $1.36 billion, missing the consensus analyst estimate of $1.38 billion, according to LSEG data.
The company’s annual revenue for 2023 was $4.6 billion, unchanged from the previous year.
Snap announced Monday that it would lay off 10% of its workforce, or 528 employees, to “incrementally” invest in the company’s growth.
In a letter to shareholders on Tuesday, Snap said it will shift its focus this year more toward growing Snapchat’s user base and investing in markets where the tech company makes the most money, including North America and Europe.
Snap’s user numbers in North America stagnated in the fourth quarter, while users in Europe grew by just 4 million compared to the previous year.
Daily active users totaled 414 million in…