Snap Inc (NYSE:SNAP) shares are heading for a near-30% plunge when they open on Tuesday after the company's chief executive Evan Spiegel warned that the Snapchat owner will miss its quarterly revenue and adjusted earnings targets.
The social media company is now planning to slow the pace of hiring through the end of the year as it looks to manage expenses, Spiegel said.
In results released after the Wall Street closing bell on Monday, the first-quarter earnings missed analyst expectations for sales and profit, with the company expecting its revenue to grow 20% to 25% year over year, and forecast adjusted EBITDA between US$0 and US$50 million.
"We believe it is now likely that we will report revenue and adjusted EBITDA below the low end of the guidance range we provided for this quarter," Spiegel wrote in Monday’s update.
He blamed economic conditions that have "deteriorated further and faster than anticipated", as well as changes to Apple's iPhone privacy settings as well as the war in Ukraine.
The shares plunged in after-market trading and ahead of the opening bell on Tuesday were on course for a 29% tumble to US$15.88, which would be their lowest in over two years.
Snap's peers fell hard as a result of the news with many plunging in after hours trade, with shares of Facebook parent Meta Platforms Inc (NASDAQ:FB) down 7%, Twitter Inc (NYSE:TWTR) 4%, and Pinterest down 12%.