Billions in market value disappears.
Snap Inc shares plunged in after-hours trading on Wednesday after the parent of the popular disappearing-messaging app Snapchat reported slowing user growth and revenue that fell short of analyst estimates amid stiff competition from Facebook.
Shares of the company snap fell more than 24% to $17.39 after the first quarterly earnings report since Snap’s red-hot initial public offering in March.
Snap said its daily active users (DAUs) rose 36.1% to 166 million in the first quarter from a year earlier, down from the 47.7% rise in users for the fourth quarter and 62.8% jump for the third quarter that the company had reported in its IPO filing.
J.P. Morgan expected Snap’s DAUs to grow to 169 million in the first quarter, while Monness, Crespi, Hardt & Co pegged DAUs at 173 million.
Still, the growth was faster than larger rival Facebook, which said its daily user base grew 18% year-over-year in the first quarter, as well as Twitter, which reported growth of 14% in daily active users from a year earlier.
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Facebook, which once made a $3 billion bid for Snapchat, has upped the ante by offering features similar to Snap on its platforms, including Instagram and WhatsApp. The company recently said Instagram Stories alone had reached 200 million daily active users.
Snap said average revenue per user rose 181.3% to 90 cents in the first quarter.
Revenue jumped nearly four-fold to $149.6 million but fell short of the average analyst forecast for revenue of $158 million, according to Thomson Reuters I/B/E/S.
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The company’s net loss widened to $2.21 billion, or $2.31 per share, in the first quarter, from $104.6 million, or 14 cents per share, due to stock-based compensation around the IPO.
Snapchat launched in 2012 as a mobile app that allows users to send photos that vanish within seconds.
The company rebranded as Snap Inc last year, and its $3.4 billion public listing was the hottest technology offering in three years.