Snapchat Parent Snap Posts Its First Loss in Daily Active Users

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The photo and video sharing app reported daily active users for the last quarter of 188 million, down from 191 million in the first quarter of the year.

At the end of a savage technology-sector earnings season, which saw Twitter and Facebook badly mauled after reporting poor numbers, Snapchat's anaemic performance was explained away as a redesign issue by CEO Evan Spiegel in prepared remarks with analysts. 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. "Even though our iterative efforts to improve the existing application have helped increase new user retention on Android by almost 20 percent since Q4 of 2016, we believe that rewriting the application presents a big opportunity because it takes advantage of the latest Android capabilities and has a modularized structure that will make it easier for us to innovate in the future", said Spiegel.

For the three month period from April through June, Snap's revenue rose 44% year-over-year to $262 million. Snap is still operating at a net loss of $353 million, but it has decreased by 20 percent since this time past year. Snap lost $353 million (roughly Rs. 2,400 crores) in the quarter, or 27 cents (about Rs. 18) per share.

Ahead of the release of the results on Tuesday, the self-described camera company warned year-over-year growth had slowed down "significantly" from the first quarter's 54%.

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Snap disclosed Tuesday that the app lost 3 million of its daily active users due in large part to its controversial redesign.

Eleven of Snapchat's shows reached an audience of over 10 million users during the quarter, compared to seven shows in Q1. According to Spiegel, new Snapchat users are primarily using Android, and it's been trying to completely rewrite its Android app for over a year now. 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. That's despite the introduction of a new model of Spectacles this quarter.

The company will continue to work on improving the app based on community feedback.

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