Snap earnings lag amid $2.2 billion loss
- Author: Zachary Reyes May 11, 2017,
May 11, 2017, 10:34
Revenue jumped almost four-fold to $149.6 million but fell short of the average analyst forecast for revenue of $158 million, according to Thomson Reuters I/B/E/S.
During Q4 of 2016, when the company first began selling Spectacles, the revenue for this category was north of $4 million.
While the company did see revenue losses, it also saw an increase in daily active users. Its net loss was $2.21 billion, or $2.31 per share, vs. a loss of $104.6 million, or 14 cents a share for the same period a year ago. Facebook-owned Instagram launched its Stories last August and has amassed more than 200 million daily active users as of last month - 20 percent more than Snapchat.
The fast-talking Spiegel seemed to especially enjoy a question about Facebook copying Snapchat features.
The maker of the Snapchat app reported revenue growth of 286 per cent to $149.6m, but analysts had been expecting nearly $10m more than that, with the consensus hovering around $158m.
From February to March, Snap added an additional 8 million users, which was also under experts' forecasts.
Investors were not pleased with the slowing rate of growth, and the company's shares were down almost 25 percent in after-hours trading.
Facebook's shadow continues to hang over Snapchat as its parent company reported disappointing numbers Wednesday. Companies that tend to have massive user growth and growing revenue streams (Facebook) don't tend to focus as much on how many "snaps" users look at. The disastrous revenue projections and the dismal growth in the number of users is a reflection of a reality that the company desperately tried to paint with bright colors.
CEO Evan Spiegel got a $750 million bonus for taking Snap public.
Leading up to its IPO, Snap made a huge point that it should be measured by user engagement - how often its users visit the app every day - and more importantly, how much money Snapchat could make from every user. Then he took a dig: "Just because Yahoo has a search box doesn't mean they're Google".