The Snapchat Q2 earnings report demonstrates the troubles Facebook and Instagram bring the once most-hyped IPOs, falling short of estimates…
The latest Snap, Inc. earnings report shows a company that’s struggling to grow its user base. Snapchat added 7.3 million DAUs or daily active users to reach 173 million. The social platform experienced a 4.2 percent rate of growth. But this marks a decline from Q1, when it grew by 5 percent to claim 166 million DAUs.
Snapchat’s Q2 Earnings Report Fails to Meet Expectations
Snap also missed in its revenue, losing -$0.16 per share ending with $181.6 million. Wall Street estimates projected a loss of -$0.14 per share, with $185.8 million in revenue, and a rise to 175 million DAUs.
All total, Snap, Inc., lost $443 million in Q2, which represents almost four-times the amount of a year earlier, when the figure stood at a $116 million loss in Q2 2016. This clearly demonstrates a company spending wildly will missing earnings.
By comparison, Twitter earned relatively no growth from Q1 to Q2 and its stock plunged as a result. Snapchat’s woes can easily be attributed to Facebook. It owns Instagram, which rolled out a clone of a Snapchat feature, Instagram Stories. In just a year’s time, Instagram Stories grew to 250 million DAUs. And, that popular video feature is just one of many on the platform.
However, Snapchat did grow in the North American market, adding 4 million users. That’s compared to 3 million in both previous two quarters and the company needs this lucrative market to drive up ad revenue. It also upped its ARPU or average revenue per unit outside the region, hitting $0.29 in Q2, rising from $0.19 in Q1. Additionally, it recorded an increase in Publisher Story views, rising 30 percent in a quarter-over-quarter comparison.
Currently, Snap, Inc. stock stands at $12.11 per share. Its IPO in May began at $17 per share.
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