Snap shares plummeted more than 25% in extended trading on Thursday after the social media company reported disappointing second-quarter results and said it plans to slow hiring as it reckons with weakening revenue growth.

Co-founders Evan Spiegel, the CEO, and technology chief Bobby Murphy agreed to new employment contracts that will keep them in their jobs through at least January 2027.

Here’s how the company did:

• Earnings per share: A loss of 2 cents, adjusted, versus expected loss of 1 cent, according to a Refinitiv survey of analysts
• Revenue: $1.11 billion versus $1.14 billion expected, according to Refinitiv
• Global Daily Active Users (DAUs): 347 million versus 344.2 million expected, according to StreetAccount

In its investor letter, Snap said it’s not providing guidance for the third quarter because “forward-looking visibility remains incredibly challenging.” The company said that revenue so far in the period is “approximately flat” from a year earlier. Analysts were expecting sales growth of 18% for the third quarter, according to Refinitiv.

“We are not satisfied with the results we are delivering, regardless of the current headwinds,” the company said in the letter.

It’s the latest chapter in a tough year for Snap, whose stock has lost almost two-thirds of its value in 2022. In May, Snap said it wouldn’t meet the second-quarter guidance it set the prior month, leading to a 43% plunge in the share price. At the time, Snap cited a macroeconomic environment that was deteriorating much faster than expected.

Even with the reduced guidance, Snap still missed estimates. Revenue increased 13% from a year ago, while analysts were expecting growth of 16%.

“The second quarter of 2022 proved more challenging than we expected,” Snap said in the investor letter. The company said it now plans to “substantially slow our rate of hiring, as well as the rate of operating expense growth.”

Snap attributed its disappointing results to slowing demand for its online ad platform. Additionally, a challenging economy, Apple’s 2021 iOS update and increased competition from companies like TikTok have led marketers to pull back on their spending.

Snap said that even some relatively healthy businesses were curbing their commitments because of the “input cost pressure due to inflation.”

“In certain high-growth sectors, businesses are reassessing investment levels amid the rising cost of capital, which is further reflected in campaign budgets and the level of bids per action,” Snap said.

Snap also announced a stock repurchasing program of up to $500 million. And for their new employment contracts, Spiegel and Murphy will receive an annual salary of $1 and no equity compensation.

Earlier this week, Snap debuted Snapchat for Web, a desktop version of the mobile Snapchat app that people can use to send messages and make video calls with their Snap contacts.

Snap revealed new desktop app shortly after it debuted its Snapchat+ paid subscription plan, which costs $3.99 a month and lets people access early features and see who has viewed their Snaps.  

Investors will soon get a clearer picture of the online ad environment. Twitter is set to report results Friday morning, followed by Alphabet and Meta next week.

Meta and Pinterest shares fell 5% in after-hours trading on Thursday while Alphabet shares declined 2.9% and Twitter dropped 1.5%.

Snap’s market cap peaked at $136 billion in September. Based on after-hours pricing, the company is now worth $20 billion.

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