Snap missed Wall Street estimates for quarterly revenue on Tuesday, as the Snapchat owner continued to struggle to compete against larger rivals for digital advertising revenue, sending its shares down 30%.

Tech giants like Facebook owner Meta Platforms and Alphabet command more attention from advertisers due to vast amounts of data to target ads, and both have cut staff over the past year to control costs.

Snap announced on Monday it would lay off 10% of staff, or 528 employees, in order to "invest incrementally" in the company's growth over time.

Revenue in the fourth quarter ended Dec. 31 was $1.36 billion, missing the consensus analyst estimate of $1.38 billion, according to LSEG data.

On the other hand, Meta's advertising sales surged 25% in the December quarter. Google's ad business grew 11% as ad sales from YouTube increased 16% in the same period, and Amazon recorded a 27% jump in ad sales.

Snap's shares plunged 30% to $12.05 in trading after the bell on Tuesday.

In a letter to shareholders, Snap said it would shift more of its focus this year to increasing Snapchat's user base and investing in markets where the tech company earns the most money, including North America and Europe.

Snap's user numbers in North America were stagnant in the fourth quarter, while users in Europe grew by just 4 million compared with the previous year.

Daily active users totaled 414 million in the fourth quarter, beating analyst estimates of 411.6 million.

Most of the growth occurred in regions outside North America and Europe, which generate less advertising revenue.

The company forecast first quarter revenue between $1.1 billion and $1.14 billion. Analysts were expecting $1.1 billion.

The Santa Monica, California-based company said it expects the number of daily users will grow to 420 million in the first quarter.

  - Reuters