Snap shares closed lower in the US Tuesday and slumped in after-hours activity after the social media platform reported revenues that disappointed investors and analysts alike. The tech firm also acknowledged its redesign has affected revenues and warned that could extend into the second quarter, too.
Snap shares ended 146% lower at $14.13 in the US Tuesday. And, the stock dropped a further 17% after the closing bell, when the results were released.
Snap Q1 earnings details
Snap’s first-quarter earnings report showed revenues for the period grew 54% to $230.7 million from a year earlier. However, that jump was below expectations.
Other figures showed that although the daily active user rate grew 15% from Q1 2017 and 2% from Q4 2017, that also wasn’t enough to impress watchers of the stock.
In addition, Snap said the average revenue per user grew 34% from a year earlier, to $1.21. However, that was also a 21% decrease from the fourth quarter of last year.
Snap’s CEO Evan Spiegel remains positive in the redesign of the Snapchat interface.
“The redesign lays the foundation for the future of both our communication products and our media platform, and we look forward to doubling down on both,” Spiegel said in the company earnings call.
And, while he admitted this change would bring – and had created – disruption among its users, the company continues to move forward and improve and support the new design.
“We are now focused on optimizing the redesign based on our ongoing experimentation and learning,” Spiegel said.
Also affecting investors view of the stock was the comment from Spiegel that the redesign disruption will likely impact Q2 revenues.
“While we anticipate that some of these factors may continue to impact our business in Q2, I’m very excited about the second half of this year. This is because of the progress we are making in our three focus areas,” Spiegel said on the earnings call.