Snap Inc, the parent company behind popular photo-sharing app Snapchat on Thursday reported second quarter results ending June 30, and while the company said that the daily active users (DAUs) grew from 143 million in second quarter of 2016 to 173 million in second quarter of 2017, an increase of 30.5 million or 21 per cent ear-over-year, Snap shares plunged 14 per cent and missed the Wall Street expectations.
The company reported a loss of $443 million this quarter, a fourfold from the $115 million net loss which Snap reported in last June.
And though 173 million is a healthy user base Snap gained after the company went public in March, it is still far behind the 250 million daily active users of Instagram Stories, and Facebook’s two billion. Snap's stock, which was priced at $17 at the IPO, is now trading at less than $14.
Snapchat’s DAUs increased 7.3 million or four per cent quarter-over-quarter, from 166 million in the first quarter of 2017.
Average revenue per user (ARPU) was $1.05 in Q2 2017, an increase of 109 per cent over Q2 2016 when ARPU was $0.50. ARPU increased 16 per cent over Q1 2017 when ARPU was $0.90.
Snap faces cutthroat competition from Facebook and Instagram that have copied some of the popular features like Stories that were first introduced by Snapchat. Also, majority of the new digital advertising revenue is going to Facebook and Google.
In May, Snapchat reported that eight million more people were using its app each day.
The company is trying hard to bounce back and has also added new features like Snap Maps, links, and background filters, for which founder Evan Spiegel commented are best strategy for overcoming imitators.