Snapchat drops daily users for first time after controversial redesign

Jamie McCarthy  Getty Images for Tribeca Film Festival

Prince Alwaleed bin Talal has acquired a 2.3 percent stake in Snapchat in a deal worth $250 million (SR950 million). That 188 million daily active user number is 8 percent higher than this time previous year, and CFO Tim Stone said that monthly active users are now up to 100 million in USA and Canada.

The Los Angeles-area company beat Wall Street's expectations for both revenue and losses, and its share price surged by more than 13% on the news in after-hours trading to almost $15, before briefly stabilizing around $14 - an overall gain of about 6%.

This appeared to confuse the market initially, who rallied behind Snap's share price initially in after-hours trading, but it seems likely this will only be a temporary reprieve before the company gets purchased by AOL, like all eventually defunct web brands.

For the current quarter ending in October, Snap said it expects revenue in the range of $265 million to $290 million.

The platform has been under pressure from Facebook's line-up of apps, which have aggressively competed with Snapchat for millennial social media users in recent years.

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Snapchat users spend 30 minutes per day on average using the app, and generated over 3 billion snaps per day. Snap previously didn't disclose any monthly user numbers, with executives arguing that daily actives better reflected the activity on the platform.

However, the firm reported its first-ever decline in quarterly users.

"It has been approximately six months since we broadly rolled out the redesign of our application, and we have been working hard to iterate and improve Snapchat based on the feedback from our community", CEO Evan Spiegel said on a call with investors. It also warned that, like Facebook and Twitter, user growth had been punished by the implementation of Europe's General Data Protection Regulation.

The earnings report didn't have any specific sales figures for its latest Spectacles hardware, though it did report $2 million in non-advertising revenue. It is also an increase of 13.6pc on the results from Q1 2018. Overall, the company posted a loss of $353m, or 27 cents a share, compared with a loss of 36 cents a share a year ago.

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