Snap noticed its first drop in every day customers in the course of the second quarter, a slip the corporate attributed to a rocky app redesign. Nonetheless, its income climbed 44% year-over-year.
Snap (, the dad or mum of Snapchat, on Tuesday reported $262 million in income in the course of the three months ending in June. It additionally recorded a narrower loss per share than analysts anticipated. Snap’s inventory soared as a lot as 11% in after-hours buying and selling, solely to fall once more because the night wore on. )
Income apart, Snapchat’s every day lively consumer base declined for the primary time. The app misplaced three million every day customers, a lower of two% in comparison with the earlier quarter. The corporate reported 188 million every day lively customers, falling in need of analysts’ expectations of about 193 million.
The disappointing consumer metric got here as Snapchat faces mounting competitors from Instagram. That platform, owned by Fb, not too long ago introduced that greater than 400 million individuals use its standard Story characteristic every day to publish images and movies that disappear after 24 hours.
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Snap blamed the decline on the “disruption” attributable to its redesign.
“It has been roughly six months since we broadly rolled out the redesign of our software, and we’ve got been working exhausting to iterate and enhance Snapchat based mostly on the suggestions from our neighborhood,” CEO Evan Spiegel mentioned on a name with buyers.
He mentioned the corporate believes it has addressed customers’ largest frustrations.
There was a small silver lining, too. Snap mentioned new consumer retention for individuals over 35 has grown greater than eight% since redesigning the app earlier this yr.
Snapchat has skilled a string of declines after lackluster earnings stories since going public in March 2017. Snap inventory was buying and selling at simply over $13 a share forward of Tuesday afternoon’s report, down from a 52-week excessive of $21.22.
The corporate has struggled with a rocky redesign broadly criticized by customers. The makeover was meant to draw new customers whereas addressing considerations about lackluster viewers progress and criticism that the app was too tough to make use of.
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Snapchat responded with a number of design tweaks to appease customers, similar to making it simpler to seek out Tales. The corporate additionally grapples with heightened competitors from Instagram, which repeatedly copies its hottest options.
“Snap has a significant app redesign in course of which stays one of many linchpins for future success and monetization, though it has encountered clear pace bumps on this entrance,” mentioned Daniel Ives, chief technique officer at GBH Insights.
Different social media networks similar to Fb ( and )Twitter ( not too long ago reported disappointing earnings. Fb suffered the only largest wipeout in inventory market historical past following its earnings report. )
On Tuesday, Prince Alwaleed bin Talal additionally mentioned he is acquired a 2.three% stake in Snapchat. He made the $250 million funding on Might 25.
CNNMoney (New York) First printed August 7, 2018: four:32 PM ET