Snapchat revenue soars despite losing users for the first time

Marco Green
August 8, 2018

With self-service ads, Snap has been able to grow revenue in regions such as Australia and the Middle East, where direct sales efforts are more limited and advertisers have few other options to market to its mainly 18-34-year-old users. It reported an adjusted loss of 14 cents a share, which was better than the average analyst expectations of a 17 cents a share loss, according to surveys by Thomson Reuters.

Snap Inc. reported on Tuesday that its number of daily active users fell by 2% to about 188 million, marking the first time the company has lost daily users since the company was founded in 2011. This was primarily driven by a slightly lower frequency of use among our user base due to the disruption caused by our redesign.

Snapchat has more than 100 million monthly active users, the company said, even though that was typically a metric it never cared about.

On the upside, the company reported second quarter revenues of $262.3m against analyst estimates of $249.8m, up 44% over the same period past year, and a loss of $0.14 earnings per share against a loss estimate of $0.18.

Evan Spiegel, Snap's CEO, blamed much of the poor results on an unpopular redesign that was released six months ago that was so unpopular social media influences like Kylie Jenner openly expressed their disappointment.

There was a small silver lining, too. The main reason for this was the controversial app design change.

Snapchat has experienced a string of declines after lackluster earnings reports since going public in March 2017.

Snapchat's massively unpopular redesign continues to hurt the company. Snap stock was trading at just over $13 a share ahead of Tuesday afternoon's report, down from a 52-week high of $21.22. The makeover was meant to attract new users while addressing concerns about lackluster audience growth and criticism that the app was too hard to use. The company also grapples with heightened competition from Instagram, which regularly copies its most popular features. Saudi investor Prince Al-Waleed bin Talal, whose investing firm owns stakes in Twitter and the Four Seasons hotel chain, said in a tweet that he'd purchased about $250 million worth of the company's shares.

Other reports by Click Lancashire

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