×

Snapchat Loses 3 Million Daily Users, but Beats Expectations in Q2 Earnings

Investors sent Snap’s stock on a rollercoaster ride Tuesday following the company’s Q2 2018 earnings release: Share prices for Snapchat’s corporate parent gained more than 10% immediately following the release of news that the company beat analysts’ revenue and earnings estimates, and that Saudi prince Alwaleed bin Talal had acquired a 2.3% stake in the company with a $250 million investment.

But the share prices gave up much of those gains soon after, as the news sunk in that the company’s user base wasn’t growing as expected, with Snapchat losing daily active users quarter-over-quarter for the first time in its history.

Snapchat ended the quarter with an average of 188 million daily active users, compared to 191 million at the end of Q1. Snap CEO Evan Spiegel blamed the decline on “the disruption caused by our redesign” in prepared remarks for Tuesday’s earnings call. That redesign, which the company had launched at the beginning of this year, had led to a widespread backlash, which included celebrities like Kylie Jenner and Chrissy Teigen publicly chastising the company.

On Tuesday, Spiegel said the company had responded to the backlash against the redesign: “We feel that we have now addressed the biggest frustrations we’ve heard and are eager to make more progress on the tremendous opportunity we now have to show more of the right content to the right people,” he said.

The company also tried to deflect from its growth problems by announcing that it had 100 million monthly active users in North America at the end of the quarter. Snap previously didn’t disclose any monthly user numbers, with executives arguing that daily actives better reflected the activity on the platform.

Snap generated some $262.26 million in revenue during the quarter ending June 30, compared to $181.67 million during the same quarter a year ago. Net losses came in at $353.31 million, compared to $443.09 million a year ago. This translates to a net loss of $0.14 per share, compared to net losses of $0.16 per share in Q2 of 2017.

Analysts had expected net losses of $0.17 per share in revenue of $251.19 million. The company had previously warned that its revenue growth would decelerate in Q2.

Other highlights from Tuesday’s earnings release:

  • Snapchat users spend 30 minutes per day on average using the app, and generated over 3 billion snaps per day.
  • Eleven of Snapchat’s shows reached an audience of over 10 million users during the quarter, compared to seven shows in Q1.
  • Average revenue per user came in at $1.40, compared to $1.05 a year ago.
  • Snap only brought in $2 million in non-advertising revenue. That’s despite the introduction of a new model of Spectacles this quarter. “We are learning a lot as we continue to iterate based on customer feedback,” Spiegel said about the smart glasses.

Popular on Variety

More Digital

  • netflix latest section

    Netflix Adds Upcoming Titles Section to Its TV App (EXCLUSIVE)

    Netflix is making it easier to keep track of all of its new releases: The company is adding a new “Latest” section to its TV app that includes both listings of newly released titles, as well as movies and TV show seasons that will be released this week and the week after. Upcoming titles are [...]

  • iQIYI headquarters building in Beijing

    Chinese Streamer iQIYI Squeezed by Changing Content Context

    Chinese video streaming giant iQIYI saw its losses deepen, in the April to June second quarter of its financial year. The company grew subscriptions, but was hit by rising content costs and lower advertising revenue Its parent company, Chinese search leader, Baidu saw its year on year profits drop, though it recovered from loss in [...]

  • westworld awakening art

    HBO Launches 'Westworld Awakening' VR Game With Survios

    Ever wanted to enter the world of “Westworld?” Now you can — except it won’t exactly be like you might have imagined it. Instead of being one of those guests living out their fantasies, you will be a host, slowly coming to grips with your life being an elaborate illusion. “Westworld Awakening” has been produced [...]

  • Spotify Announces Upgrades to Family Plan,

    Spotify Announces Upgrades to Family Plan, at No Charge in U.S. and U.K.

    Just days after reports emerged that Spotify is aiming to increase the price of its family plan in its home market of Scandinavia, the streaming giant announced an upgrade to the plan — with no price increase in the U.S. and U.K., where it remains at $14.99 and £15, respectively. A rep for the company [...]

  • Mike Vaughan

    Former Venmo COO Mike Vaughan Joins Stem's Board

    Los Angeles-based music distribution and payments startup Stem has appointed former Venmo executive Mike Vaughan to its board of directors. Vaughan was chief operating officer of Venmo from 2011 until earlier this year, and is now executive in residence at Oak HC/FT. “The music industry can benefit tremendously from innovation in the way money flows [...]

  • Streamy Awards

    Streamy Awards 2019 Return to YouTube for Exclusive Live-Stream

    The 9th Annual Streamy Awards will again be available to stream live on YouTube exclusively. The 2019 awards ceremony will take place at the Beverly Hilton in Beverly Hills on Friday, Dec. 13 and will stream live globally on YouTube via youtube.com/streamys. Videos from the 2018 Streamy Awards received over 6.9 million views on YouTube. [...]

  • Stefan Heinrich Henriquez - Cameo

    Celeb Video-Shoutout Startup Cameo Hires Ex-TikTok Exec Stefan Heinrich Henriquez

    Cameo, a startup that lets consumers purchase video shoutouts from celebrities, tapped Stefan Heinrich Henriquez as chief marketing officer and general manager of international. Heinrich, most recently head of marketing for short-form video app TikTok, will lead the company’s global growth and branding and play a key role in Cameo’s continued global expansion. He’s based [...]

More From Our Brands

Access exclusive content