Snapchat’s parent Snap Inc has reported a revenue of $1.36 billion for the fourth and final quarter of 2023 and its shares plunged 30%, as it tries to get out of the digital advertising slump that has set in for the tech giant.

The actual revenue couldn’t beat analysts’ average projection of $1.38 billion. For the full year, revenue growth was flat, “reflecting a challenging operating environment,” according to a letter to shareholders. Net loss was $248 million.

The company’s brand-oriented advertising business declined 3% year-over-year, while its direct-response advertising business grew 3% year-over-year. Other revenue, which is driven primarily by Snapchat+, grew more than 200% year-over-year in Q4.

The company attributed the slump to the onset of the conflict in the Middle East. “It was a headwind to year-over-year growth of approximately 2 percentage points in Q4,” it said.

In Q4, global impression volume grew 4% year-over-year, due to the continued growth of Snap’s Stories Revenue Share Program as well as expanded advertising opportunities within Spotlight. Total eCPMs declined 2% year-over-year, which reflects the growth in impressions outpacing advertising demand growth in the period as the company continues to invest in its products to drive deeper engagement and increase time spent watching content.

Snap’s Q1 2024 outlook said that it will be focused on executing against its roadmap to deliver improvements to its direct-response advertising platform to drive improved results for its advertising partners and accelerate top line growth. “Our guidance range is for revenue of $1,095 million to $1,135 million, implying year-over-year revenue growth of 11% to 15%,” it further said.

“2023 was a pivotal year for Snap, as we transformed our advertising business and continued to expand our global community, reaching 414 million daily active users,” said Evan Spiegel, CEO.

The investor letter also shared that the company has made significant progress with its small- and medium-size advertising partners by building customized solutions and recommendations and dynamically delivering these solutions for specific advertiser segments. “This has led to a 20% year-over-year increase in the number of small- and medium-size advertisers on Snapchat.”

Earlier this week,Snapannounced that it will be laying off 10% of its workforce to “promote in-person collaboration”.

The social media giant’s last major round of cuts was in 2022, when it laid off 20% of its staff.