Snap's stock dropped 14% following its first-quarter earnings report, as the company refrained from offering second-quarter guidance due to uncertain macroeconomic conditions affecting advertising demand. Chief Financial Officer Derek Andersen noted that trade restrictions and changes to the de minimis exception were hurting Snap, particularly with Chinese advertisers reducing spending. Analysts highlighted the challenges facing Snap, compounded by inconsistent earnings and slowed user growth in critical markets, leading to concerns about the company's financial stability moving forward.
Given the uncertainty with respect to how macroeconomic 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.
We've heard from a subset of advertisers that their spending has been impacted by the changes to the de minimis exemption.
The absence of second-quarter guidance is alarming and reflects the ongoing challenges facing Snap amid broader economic headwinds.
Tariffs and other trade restrictions make items expensive and less appealing for Chinese companies to advertise on US platforms.
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