(Bloomberg) -- Last year was the toughest on record for companies that depend on digital advertising. Snap Inc. says the pain is leveling off.

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“It seems like advertising demand hasn’t really improved, but it hasn’t gotten significantly worse either,” Chief Executive Officer Evan Spiegel said on a call with analysts Tuesday. “Our partners are just managing their spend very cautiously so they can react quickly to any changes in the environment.”

The maker of the Snapchat social media app, alongside digital ad giants like Meta Platforms Inc. and Alphabet Inc., spent 2022 dealing with the fallout of a shaky economy, which made marketers reduce budgets. At the same time, a change in Apple Inc.’s privacy policies made marketing on iPhones less effective. The shares of Snap, Meta and Alphabet tumbled last year, and all three cut staff and adjusted priorities to help make up for the loss in sales.

Snap was the first of the bunch to report results for the fourth quarter, which includes the holiday shopping season. The company said revenue of $1.3 billion was flat compared to a year earlier — its first-ever flat quarter. Snap fell 16% in extended trading, dragging down Facebook parent Meta and Pinterest Inc.

Because it often reports earnings first, Snap has become a bellwether for other digital advertising companies. Last year, it was the first to raise concerns about the slowdown in marketer spending online and to fire a significant number of employees — 20% of its workforce — to cut costs in the face of falling revenue.

The Santa Monica, California company has spent the last two quarters refocusing, cutting projects that don’t contribute to user and revenue growth, or bolster its work in artificial intelligence.