Snap Q2 2022 Results Disappoint and Raise More Social Network Advertising Questions; Decrease in FVE

Snap delivered disappointing second-quarter 2022 results as both the top and bottom lines came in short of the FactSet consensus estimates. In addition, with significant uncertainty surrounding advertising demand for the platform, the firm did not provide any financial guidance. However, management expects continuing double-digit user growth in the third quarter. Snap’s latest results display the impact of the macro environment uncertainty in addition to advertisers’ reaction to the effect of Apple’s policies on the platform’s direct response ad measurement capabilities. While Snap’s numbers may also indicate quarterly weakness in other social media platforms, we think on platforms such as TikTok, Meta’s Instagram, and Google’s YouTube, all of which have much larger user bases, the impact may be less.