'We expect that the operating environment will continue to be challenging in the months ahead,' the company said in a statement. Santa Monica-based Snap said rising inflation has forced advertisers to reduce their marketing budgets. READ: US markets lose their shine to end the day in negative territory Revenue rose 6% year-over-year, and daily active users increased 19% year-over-year to 363 million. The social media company reported weaker-than-expected revenue of US$1.13 billion versus the $1.14 billion expected by Wall Street for the quarter ended September 30. “We would need to see evidence of more durable ad spending and further content differentiation to get more constructive.Snap Inc (NYSE:SNAP) saw its stock price plunge in after-hours trading as the company behind Snapchat beat 3Q expectations on earnings but missed on revenue due to a decrease in advertising. “Snap’s ongoing challenges in projecting revenue, the concentrated advertiser base and outsized exposure to lower ad budgets leave us sidelined,” RBC’s Brad Erickson wrote in a note to clients, in which he dropped his 12-month price target to $8 from $11.

Several analysts have darkened their outlook for the company. While some other social media stocks wound up collateral damage today, given the unsettling portrait of social and digital ad spending presented by Snap management, none got routed like Snap. Further spooking investors, Snap forecast the flat fourth quarter despite saying it had seen a 9% uptick in revenue thus far in the quarter. That was the slowest rate of growth in any quarter since the company went public in 2017 and was below the 8% projection Snap offered last August. In the most recent quarter, Snap reported $1.13 billion in revenue, which was up 6% over the prior-year period. Since then, the company benefited from strong tailwinds as both users and advertisers grew more and more attached to the platform and spending on digital advertising surged. That was during the early months of 2019. The last time Snap shares were in their current price range, the company was struggling to overcome a series of high-profile exec departures, a deeply unpopular redesign and glitches with Snapchat’s app for Android devices.

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