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2017-05-10 19:42:02
Snap’s $2.2 Billion Loss Caps Bumpy First Months as a Public Company

Just two months into its life as a public company, Snap is struggling.

On Wednesday, the parent of the messaging app Snapchat reported earnings that missed Wall Street expectations in almost every regard. Not only did Snap record a $2.2 billion loss for the first quarter, its revenue was lighter than expected and its user growth decelerated.

The results mark a bumpy start for Snap after its much-hyped initial public offering in March. Since then, the company has been buffeted by competition from Facebook and comparisons to Twitter, the social media service that has suffered from anemic user growth.

In total, Snap said its number of daily users increased to 166 million in the first quarter, up 36 percent from a year ago. That was down from 53 percent growth in users in the first quarter of 2016, continuing a slowdown in new users that Snap first disclosed in its public offering filings this year.

Revenue was $149.6 million, almost four times as much as a year ago but falling short of Wall Street estimates of $158.6 million.

Investors sent Snap’s shares down more than 25 percent in after-hours trading to about $17.17, just above the company’s I.P.O. price of $17 a share. The stock closed at $22.96 on Wednesday.

Snap emphasized on a call with analysts on Wednesday that its users were spending more time than ever on Snapchat, as it seeks to convince investors that loyalty to its products matters more than the size of its user base.

“We still have a lot of work to do, but I’m excited by the amount of progress we’ve made in such a short time,” Evan Spiegel, the chief executive of Snap, said on the call.

He emphasized that users were still highly engaged with Snap. Snapchat users created on average more than 3 billion snaps, or pieces of short content, every day, up from 2.5 billion the previous quarter.