Snap’s Missed User Target Shows Challenge Predicting Growth
- Snapchat parent says pandemic makes business hard to forecast
- Advertising events like sports, movies may not provide boost
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Snap Inc. missed its own forecast for user growth last quarter and held off making projections for the current period, a reminder of how hard it is to predict business direction during the pandemic.
The company, owner of the Snapchat social media app, said that gains in daily active users seen at the beginning of the Covid-19 outbreak have leveled off. Although revenue topped analysts’ estimates and is on track to do so again in the current period, Snap isn’t promising anything. Instead, it said the events that usually drive third-quarter advertising sales -- like sports games, movie releases and back-to-school shopping -- can’t be counted on. Shares dropped about 6% in late trading.