Snap shares plummet as user growth stutters

Evan Spiegel

Evan Spiegel

In total, Snap's third quarter revenue was $207.9 million, up 62 percent from a year ago but below Wall Street estimates of $235.5 million. Snapchat added just 4.5 million users to reach 179 million total daily users globally, while analysts had expected 180 million users.

The company's share price is now almost $5 under water after a $17 IPO early this year. Snap's revenue for the quarter was up 153.1% on a year-over-year basis. sell-side analysts anticipate that Snap will post -2.81 earnings per share for the current year.

The original version of this piece can be viewed at https://www.truebluetribune.com/2017/11/07/snap-inc-snap-issues-quarterly-earnings-results-beats-estimates-by-0-17-eps.html.

In other Snap news, VP Timothy Sehn sold 400,000 shares of the stock in a transaction that occurred on Thursday, November 2nd.

Snap Inc shares fell $0.08 (-0.52%) in premarket trading Monday.

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On Monday evening a temporary hang-up with the app drove enough users to make #Snapchatdown a trending hashtag on Twitter, where users recounted their efforts to get the app to load. Combined, that gave the app an overall ranking of #5 for the quarter, the report noted. He said over 60% of Daily Active Users create Snaps with its camera every day. The company also dropped out of the top 10 most-downloaded apps on Apple's App Store this quarter, TechCrunch recently reported. The company has spent over $1.3 billion on research and development through the first three quarters of the year, up 1000% from the $118 million it had spent over the same period last year.

The average revenue per user (ARPU) came in at $1.17, while analysts were calling for ARPU of $1.30.

Spiegel said that there was a "strong likelihood" that the redesign would cause short-term disruptions to the company's business. "We're willing to take that risk for what we believe are substantial long-term benefits to our business". Instagram has shamelessly copied many Snap features using a more straight-forward interface, most notably the Stories feature that lets users share a collection of photos and videos that expire within 24 hours.

CEO Evan Spiegel admitted the company "grew our Daily Active Users at a lower rate than we would have liked". Then Snapchat rebranded as Snap Inc and became a self-described camera company with the rollout of digital googles it called Spectacles. "We will be hard at work delivering on our priorities: user growth, content, and augmented reality".

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