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Will Snapchat's New Features Make It More Useful for Marketers?
June 23 2017, 03:32 | Alonzo Simpson
Snap Inc. Misses On Revenue In Q1
On Wednesday, Snapchat parent company Snap, Inc. posted a huge loss along with a slowdown in its user growth, while its revenue came up short of expectations of Wall Street in its first report for earnings as a public entity.
On Tuesday, May 11, the company posted a $2.2 billion loss in the first quarter, much of which was tied to compensation following the company's IPO in March.
Facebook has now launched Snapchat-like camera features in Messenger, WhatsApp, Instagram and its flagship app.
One thing Snap could point to as a moderate success, though, is how Snapchat users appear to be more loyal than most. The owner of the Snapchat application attracted fewer users than anticipated in the first quarter of this year, a result that drove stocks to plummet more than 20 percent. That's a 36 percent year-over-year increase, but only a tad better than Snapchat did at the end of last year.
Investors are anxious that Snapchat will continue to falter as Facebook (NASDAQ:FB) continues to target the app's audience.
Shares in Snap, the owners of social media app Snapchat, fell dramatically after the company reported a $2.2bn loss and slowing growth.
J.P. Morgan expected Snap's first-quarter DAUs to grow to 169 million, while Monness, Crespi, Hardt & Co Inc pegged it at 173 million.
Snap hit 166 million daily active users in the first quarter of 2017 for a growth rate of 5 percent.
Snap reported US$150 million in total revenue in the quarter, up 286% from US$39 million a year ago. Twenty percent of Snap Ads, or vertical video units that play between user stories and on Discover, were bought programmatically this quarter, said Chief Strategy Officer Imran Kahn.
Snap stock is down $3.48, or 15%, at $19.49, in late trading.
Snapchat, however, has already been more than eclipsed by Instagram Stories. While Snap lumps the revenue from Spectacles into its "other" category, CFO Drew Vollereo explained that the connected glasses made up the majority of that revenue.
For years, Facebook has been trying to copy Snapchat.