Snap isn’t happy with how much money it’s making - The Verge
Snap CEO Evan Spiegel said the company wasn’t satisfied with its financial performance. Spiegel agreed to stay on for another four years.
Snap knows it can do better. The company reported earnings results for the second quarter of 2022 this afternoon, and the numbers show a company that’s continuing to grow its users and revenue — but at a much slower rate than it used to.
“Our financial results for Q2 do not reflect the scale of our ambition,” the company wrote in a note to investors. “We are not satisfied with the results we are delivering.”
The message was part of a rallying cry to investors that essentially says hang tight, we’re working on it. To turn things around, Snap is promising to “recalibrate” its hiring, goals, and investments. And, in a splashier move, the company said it had signed Snap co-founders Evan Spiegel and Bobby Murphy, the company’s CEO and CTO, to stick around for another four years, through the end of 2026.
Spiegel and Murphy will be paid $1 per year with no additional equity. They will, however, be incentivized with the promise of a stock split should Snap’s share price reach $40 within the next 10 years, up from its current value of around $16. Snap says the split would allow Spiegel and Murphy to sell non-voting shares of Snap, allowing them to hold onto their voting shares and retain control over the company.
This rallying cry isn’t coming because Snap is falling apart. The company made $1.11 billion in revenue during Q2, up from $982 million in 2021, and it added 15 million more users, bringing it to 347 million.
Rating: 5