Snap First-Quarter Earnings Miss On Revenue As Stock Crashes

Randal Sanchez
May 2, 2018

Snap Inc. on Tuesday said revenue rose 54% in the first quarter from a year ago, but that missed analyst estimates and fell almost 20% short of the previous quarter as efforts to wrest a larger share of advertisers' budgets were impeded by Facebook Inc. and Alphabet Inc.'s Google.

Wall Street was unimpressed, and Snap's stock price plummeted in after-hours trading.

Snapchat user numbers rose only 2% in the last three months, as parent company Snap Inc reported financial results below analyst expectations.

That missed the consensus estimate of $243.6 million.

The social media service said its number of daily active users had risen to 191 million, up from 187 million in the last quarter, but the increase was smaller than predicted.

Prince William and Kate Middleton officially register Prince Louis' birth - see certificate
The Duchess of Cambridge is expected to return to her royal duties in the fall as she takes time to care for her family. By the evening, the Duke and Duchess of Cambridge appeared on the steps of the Lindo Wing with their still unnamed son.

A logo of Snap is displayed on a monitor above the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., December 5, 2017.

"Our redesign created some headwinds in our revenue this quarter by disrupting user behavior and creating some apprehension among our advertising partners", Snap CEO Evan Spiegel said in prepared remarks.

It looks like Kylie Jenner's return to Snapchat wasn't enough of a boost for the app. It also posted a net loss of $385.8 million. "The confluence of the app redesign and backlash from core power users was a gut punch to Snap during the quarter, with signs more speed bumps could be on the horizon".

Looking ahead, Spiegel said Snap is focused on optimizing the redesign, based on his team's ongoing experimentation and learning. A petition asking the company to remove the redesign now has more than 1.2 million signatures.

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