Snap reported second-quarter sales that fell just short of analyst expectations, a slight step back in the company’s years-long quest to rebuild its core advertising business.
The Snapchat parent reported quarterly revenue of $1.24 billion, just shy of analyst’s expectations of $1.25 billion. Snap surpassed expectations for user growth, and its revenue forecast for the current quarter was in line with analyst estimates.
Over the past few years, Snap has overhauled its advertising business to focus more on direct response ads that prompt users to take specific actions, such as downloading an app or purchasing a product. Traditionally, Snap had focused more heavily on brand awareness campaigns, which are less costly for the company to support, but also less lucrative. In the process of rebuilding its ad tech, the social media site saw its revenue dragged down for several quarters before a return to growth late last year.