Snap Doesn’t Give Outlook, Will Cut Costs Because of Economic ‘Uncertainty’

Shares of Snap (SNAP) sank 16% Wednesday, a day after the social media company said it wouldn’t provide a current-quarter outlook and plans to cut costs because of “uncertainty” about the future.

The Snapchat operator wrote in a letter to investors that because it’s not clear “how macro economic conditions may evolve in the months ahead, and how this may impact advertising demand more broadly, we do not intend to share formal financial guidance for Q2.”

The company explained that even though revenue continued to increase, “we have experienced headwinds to start the current quarter, and we believe it is prudent to continue to balance our level of investment with realized revenue growth.”

As a result, Snap is reducing its expectation for full-year adjusted operating expenses to $2.65 billion to $2.70 billion from its previous estimate of $2.70 billion to $2.75 billion. It also sees its 2025 stock compensation at $1.13 billion to $1.16 billion, down from the previous forecast of $1.15 billion to $1.20 billion.

Q1 Results Top Estimates

The warning offset better-than-anticipated first-quarter results. The company reported a net loss of $0.08 per share on revenue that rose 14% year-over-year to $1.36 billion. Analysts surveyed by Visible Alpha were looking for a loss of $0.14 per share and revenue of $1.35 billion.

CEO Evan Spiegel noted Snap surpassed 900 million monthly active users (MAU) for the first time, and that the revenue jump was driven by “the progress we have made with our direct-response advertising solutions, continued momentum in driving performance for small and medium sized businesses, and the growth of our Snapchat+ subscription business.”

Snap shares have slumped nearly 30% so far in 2025.