Snapchat lost three million users in Q2 2018

Andrew Cummings
August 9, 2018

The photo and video sharing app reported daily active users for the last quarter of 188 million, down from 191 million in the first quarter of the year.

Despite the massive drop in users, Snap Inc reported a narrower loss per share than investors expected, causing Snap Inc's stock to increase by 11% in after-hours trading.

"While our Monthly Active Users continued to grow this quarter, we saw a 2 percent decline in our Daily Active Users", CEO Evan Spiegel said on a call with analysts after the report.

Snap lost about 1 million users in each of its three geographic reporting regions: North America, Europe and rest of world.

Snap, the parent company of Snapchat, has announced its first decline in daily active users following a controversial redesign.

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. Overall, the company posted a loss of $353m, or 27 cents a share, compared with a loss of 36 cents a share a year ago. After initially shooting up more than 10 percent following the unexpected revenue beat, it then dipped to below its closing price before ticking back up slightly. Analysts on average expected Snap to gain almost 2 million users in the second quarter from the first quarter, according to Thomson Reuters I/B/E/S.

Snap, which has never had a profitable quarter, went public in March 2017 with a $17 (roughly Rs. 1,200) share price. Revenues were also better than anticipated, coming in at $262 million where analysts had expected $250 million.

The prince had previously been rumoured to be interested in investing in Snap prior to its IPO, though in 2015 a source told Reuters there were "no plans to invest".

The company has been working to convince big advertisers to spend more of their budgets on Snapchat ads and reach the app's base of mainly 18-34-year-old users, but companies have largely considered the spending experimental.

Ahead of the release of the results on Tuesday, the self-described camera company warned year-over-year growth had slowed down "significantly" from the first quarter's 54%.

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