If good news isn’t as good as it’s expected to be, is it really good news at all?

Snap had positive Q2 results to share with investors on Thursday, though it was diminished by lower than expected guidance for Q3. As a result, the social networks saw its stock plunge 20% in extended trading yesterday.

For the second quarter of 2024, revenue was $1.237 million, up 16% year-over-year from $1.068 million. Average revenue per user was $2.86, compared to $2.69 in the prior year.

Revenue is expected to fall between $1.335 billion and $1.375 billion next quarter, implying year-over-year revenue growth of 12% to 16%. Analysts, however, were expecting $1.36 billion for the third quarter, which led shares to drop 20%.

Snap said it marked “an important milestone” in Q2 as it reached more than 850 million monthly active users (MAU), up from 800 million in February. This “despite the impact of a weaker brand advertising environment for certain consumer discretionary verticals,” the company said in a letter to investors.

The company touted the progress it has made in its direct response business, as well as the continued growth in the total number of active advertisers, which more than doubled year-over-year in Q2.

“We are focused on executing against our roadmap to deliver improvements to our advertising platform to drive strong performance for our advertising partners,” the company said.

“Our investment plans for Q3 remain consistent with the full-year cost guidance ranges we provided last quarter, which assume we make modest incremental investments in infrastructure, personnel, and marketing to sustain the momentum we have established in our business,” the company wrote. “And that we continue to experience the impact of an increasing legal and regulatory burden on our cost structure.”