Friday, 22 February, 2019

Snap Reports First Drop in Snapchat Daily Users, Saudi Prince Takes Stake

Jamie McCarthy  Getty Images for Tribeca Film Festival Jamie McCarthy Getty Images for Tribeca Film Festival
Nellie Chapman | 08 August, 2018, 16:26

Snap declined to estimate user growth for next quarter, but noted that third-quarter earnings have historically "trended down" for the company.

On Tuesday the messaging app's parent company, Snap Inc., reported its Q2 2018 earnings, and it included its first-ever decline in daily active users following a highly controversial decline.

The deal, in which he purchased shares for an average price of $11 each, was finalised in May, he said.

Snap lost about 1 million users in each of its three geographic reporting regions: North America, Europe and rest of world. Chief Executive Evan Spiegel said in prepared remarks that the redesign was the primary reason for usage slipping, but he credited the changes for increasing viewership of key ad-supported content this year.

Though the company said user counts may fall even further, it didn't provide insights about the recently released Spectacles (which CNET liked but didn't love).

Snapchat's ad revenue is on the rise, but the company saw its first decline in users, according to the quarterly report it disclosed on Tuesday. The company also grapples with heightened competition from Instagram, which regularly copies its most popular features.

Investors, it seems, are unsure what to make of Snap's mixed results.

Earnings from Facebook and Twitter Inc in recent weeks spooked social media investors by showing issues around data privacy, abusive content and phony accounts were weighing on user growth. Both companies shed some 19 percent in market value after reporting, and the results also weighed on Snap shares.

Advertising revenue is up 48 percent year-over-year as well, making the platform all the more enticing to the potential advertiser. Snap later made updates to roll back some of the more unpopular changes, but the damage was done.

However, there was positive news elsewhere in the results as parent company Snap Inc reported revenue of 262.2 million dollars (£202.6m), up 44% on this time a year ago and above analyst expectations.

Snap, which has never had a profitable quarter, went public in March 2017 with a $17 (roughly Rs. 1,200) share price.