Snap Shares Are Getting Crushed After a Disappointing Earnings Report
Snap Inc reported a lower-than-expected number of daily active users for Snapchat, its popular messaging app, for the second quarter as the company grapples with stiff competition from Facebook (FB), sending its shares down about 6% in extended trading.
Snap said on Thursday its daily active users (DAUs) rose to 173 million in the quarter ended June 30 from 143 million in the year-earlier quarter and 166 million in the previous quarter.
However, analysts on an average were expecting Snap to report 175.2 million DAUs, according to financial data analytics firm FactSet.
Snap said average revenue per user rose to $1.05 in the quarter from 50 cents a year earlier, while analysts were expecting $1.07, according to FactSet.
Snapchat, which quickly grew in popularity among users under 30, hit a rough patch since going public in March as Wall Street took a critical stance on the company’s slowing user growth and the increasing competition from Facebook’s Instagram.
Instagram Stories allows users to post images and video that disappear after 24 hours—a feature that replicates Snapchat and is fast becoming more popular than Snapchat itself.
Instagram Stories, now one year old, had more than 250 million users as of Aug. 2, up from about 250 million in June and 200 million in April.
Snap said its revenue more than doubled to $181.7 million in the quarter. The company gets some revenue from branded or sponsored filters and lenses, but the bulk comes from advertisements.
Net loss widened to $443.1 million, or 36 cents per share, from $115.9 million, or 14 cents per share. Excluding certain items, Snap lost 16 cents per share in the latest quarter.
Snap’s shares were down 6.1% at $12.93 in extended trading. The stock debuted on March 2 at $24, compared with its IPO price of $17.