Snapchat Loses 3 Million Daily Users, But Posts Q2 Earnings Beat

Snapchat Parent Snap Posts Its First Loss in Daily Active Users

Snapchat Parent Snap Posts Its First Loss in Daily Active Users

Saudi Arabia's Prince Alwaleed bin Talal has bought a 2.3% stake in Snap - the company behind Snapchat - for $250m (£193m). The company reported 188 million active Snapchat users in Q2, 2018, down from 191 million it reported in the quarter before it.

The Los Angeles-area company beat Wall Street's expectations for both revenue and losses, and its share price surged by more than 13% on the news in after-hours trading to almost $15, before briefly stabilizing around $14 - an overall gain of about 6%.

For the three month period from April through June, Snap's revenue rose 44% year-over-year to $262 million.

Shares in Snap climbed more than 12 percent in after-hours trading before reversing course and going flat.

Snap 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, and it beat analyst revenue forecasts as it drew in more worldwide and small business advertisers. The company, which just marked the two-year anniversary of its own version of Stories, recently announced it had crossed 1 billion users. That topped Wall Street forecasts of $250 million. In his prepared remarks, CEO Evan Spiegel said that the decline was primarily driven by disruption caused by the aforementioned redesign.

The deal comes as Snap posted second-quarter earnings on Tuesday that showed Snapchat had lost users.

Snap shares have dropped 10 percent since the beginning of the year.

Snapchat was forced to redesign the new look, but not before it started to experience a decline in users at the end of the first quarter, which continued into the latest quarter. "It has been approximately six months since we broadly rolled out the redesign of our application, and we have been working hard to iterate and improve Snapchat based on the feedback from the community", he said.

Earnings from Facebook and Twitter in recent weeks spooked social media investors by showing issues around data privacy, abusive content and phoney accounts were weighing on user growth and sending expenses higher. That has come at the cost of the premium feel Snap had tried to ascribe to its ads, but given overall sales a jolt by attracting more advertisers.

Recommended News

  • Charges against Najib in line with rule of law, says Hishammuddin

    Charges against Najib in line with rule of law, says Hishammuddin

    Najib has been charged in court as part of an investigation into missing money at scandal-tainted state fund 1MDB. He has pleaded not guilty to those charges and was released after posting bail, but his passport was held.
    New planet with strong aurora discovered 20 light years from Earth

    New planet with strong aurora discovered 20 light years from Earth

    The difference between what constitutes gas giants and brown dwarfs is a matter of serious debate among astronomers, says NRAO. Brown dwarfs have long baffled experts because they're too big to be considered planets but are not big enough to be stars.
    Everton's Digne hits back over his 'Liverpool tattoo'

    Everton's Digne hits back over his 'Liverpool tattoo'

    Silva said Digne is a "high-quality player, aggressive, with good technical ability. he is accustomed to winning". After seeing the tattoo, everyone started to assume Digne is a Liverpool fan and he wanted to join the club.
  • US  finalizes next China tariff list targeting $16 billion in imports

    US finalizes next China tariff list targeting $16 billion in imports

    BEIJING-China's imports surged in July as it moved to shore up its economy and prepared for a long-term trade battle with the U.S. The retaliatory tariffs hit USA industries in areas of the US where President Trump has received significant support.
    Sergey Kovalev faces a tough challenger in Eleider

    Sergey Kovalev faces a tough challenger in Eleider "Storm" Alvarez

    According to CompuBox statistics, Kovalev landed 91 of 339 punches (27 percent) and Alvarez connected with 73 of 251 (29 percent). Bivol did his part, easily outpointing Chilemba (25-6-2, 10 KOs) in the co-feature, but Kovalev didn't do his.
    OpenAI Bots Crush the Best Human Dota 2 Players in the World

    OpenAI Bots Crush the Best Human Dota 2 Players in the World

    A lot of humans think they're so good at video games that they make the point of describing themselves as "gamers". OpenAI is scheduled to face an active professional squad at The International 8, which kicks off on August 15.
  • Jurgen Klopp praises Anfield reception for Loris Karius

    Jurgen Klopp praises Anfield reception for Loris Karius

    Wijnaldum and Salah combined to set up Firmino for a shot that deflected into the top corner off Lorenzo De Silvestri . Liverpool should have taken the lead moments earlier when gifted a hugely generous penalty by referee Michael Oliver .
    Osinbajo fires DSS boss, summons IG Idris, over siege on National Assembly

    Osinbajo fires DSS boss, summons IG Idris, over siege on National Assembly

    Aisha Buhari has asked politicians to operate within the guidelines of the constitution of the Federal Republic of Nigeria. A spokesman for Vice President Yemi Osinbajo said in comments on Twitter that DSS head Lawal Musa Daura had been fired.
    Florida school shooter heard voices telling him to kill

    Florida school shooter heard voices telling him to kill

    An independent review commissioned by the Broward County School Board found that Cruz has been aggressive since he was young. A recording featured Cruz reportedly muttering "kill me" to himself following his arrest, despite being alone in a room.
  • China Announces More Tariffs on US Imports

    China Announces More Tariffs on US Imports

    China immediately expanded its own list of types of USA products to be tariffed, including farm products, cars and crude oil. Trump portrays the tariffs as a tax on foreigners, but the reality is that tariffs are taxes on USA companies and consumers.
    PTI officially names Imran Khan as PM candidate

    PTI officially names Imran Khan as PM candidate

    Sharing preliminary party tallies, an ECP official said the PTI was leading with 115 NA seats. The PTI chief had received 92,891 votes while the PML-N leader managed to get 44,314 votes.
    Star witness to take stand for second day in Manafort trial

    Star witness to take stand for second day in Manafort trial

    But she said she was under the impression that Mr Manafort had been directing his deputies' actions and "knew what was going on". Gates also testified he and Manafort knew it was a crime because they had been notified by Manafort's accountants in emails.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.