Every three months, Wall Street is watching with anticipation the exceptional results of Big Tech companies. In just over a week, Snap, Alphabet, Microsoft, Meta, Spotify, Amazon and Apple have all told investors their performance.
For years, it’s been an unfettered success story, with revenue, profit, and user numbers generally going in one direction: up. This time however, as they announced their second quarter results in recent days, the big tech companies spoke of stagnant growth or decline and revised their future forecasts in the face of what they expect to be an economic slowdown. hard. And with each call for results, two names kept coming back: Apple and TikTok.
Both companies topped the results of the others due to their increasingly prominent role in the world of technology. TikTok’s user base has grown to one billion users in five years, far surpassing all previous apps, including Facebook and Meta-owned Instagram, both of which took eight years to achieve the same goal. From Apple comes the threat of changes that could impact customer reach and competition from others in the metaverse.
The first of the cohort was Snap, which released its results on July 21. While the company’s 347 million daily active users beat analysts’ forecast of 343 million, Snap’s revenue was disappointing. “Our second quarter financial results do not reflect our ambition” CEO Evan Spiegel said at the time.
Dan Ives, senior analyst at Los Angeles investment firm Wedbush Securities, said the results were a “sinker”. Snap’s results demonstrate “a slowdown in digital advertising, privacy headwinds from Apple iOS and competition from TikTok that is still heating up,” Ives says. Snap CFO Derek Anderson admitted as much on the analyst call, alongside earnings. “The competition, whether it’s with TikTok or any of the other very large and sophisticated players in this space, has only intensified,” he explained.
One day later, July 22, Twitter results focused on the $33 million spent on work The intermittent purchase of the company by Elon Musk. The company reported a year-over-year decline in revenue that it said reflected “advertising industry headwinds.” Twitter didn’t hold an analyst call or mention Apple by name, but “headwinds” were likely code for its data-sharing changes.
On July 26, Alphabet, the parent company of Google and YouTube, announced its results. In his earnings call, the company’s CEO, Sundar Pichai, said YouTube Shorts, his take on TikTok-like short videos, is watched by more than 1.5 billion users every month. A day later, Meta, the parent company of Facebook and Instagram, also unveiled its results.
“The big innovation for TikTok was realizing that social media no longer had to be social, just media,” says digital strategist Jay Owens. And this recognition is what other companies, including Meta, with Instagram, are trying to follow. “Meta no doubt had data showing that friends and family were no longer the main sources of engagement on Instagram and Facebook, but didn’t really dare to take the leap to make Instagram’s Explore tab the homepage,” she says. “Now they’re playing catch-up, and users seem set to have not one but three vertical video-dominated apps.”