Snap shares opened sharply lower in the US Friday, as the camera and social media company’s third quarter earnings showed it had lost 2 million daily active users, compared with the second quarter. While revenues grew again, it also posted another net loss.
Snap shares ended the US Thursday trading session a little higher at $6.99. The stock then sank by over 10% after-hours and has opened 10.73% lower to trade at $6.24, Friday.
Snap’s Q3 earnings
Snap’s third quarter earnings, which were released after the US stock markets closed Thursday, showed total revenue growth of 43%, from the same period a year earlier, to a record high of $298 million.
The company also said its quarterly net loss improved to $325 million in Q3, from a loss of $443 million in Q3 2017.
“We’re investing in long-term growth opportunities and driving operational efficiencies,” said Snap’s Chief Finance Officer, Tim Stone. “We achieved record revenue and strong bottom-line results this quarter and expect a record fourth quarter, as we continue to invest in innovation for our community and scale our business,” Stone added.
However, analysts and investors alike, noted other details in the report. They include its average revenue per user metrics, which fell 12.5% in the developing world, but grew 14% in the US and Europe.
Looking ahead, Snap forecasts fourth quarter revenues to hit another fresh high of $355-$380 million, or growth of 24-33% from Q4 2017. The tech firm also expects an unadjusted loss of $100-75 million, which is an improvement on the $159 million loss reported in the fourth quarter of 2017.
Daily average user number falls
Another downbeat details in Snap’s third quarter report was a 2 million decline in its daily average user levels to 186 million, from 188 million in the second quarter.
The platform has been dogged by negative feedback on the redesign it launched earlier in the year and it appears it’s still struggling to net new users.
“While we have incredible reach among our core demographic of 13- to 34-year-olds in the US and Europe, there are billions of people worldwide who do not yet use Snapchat,” Snap CEO, Evan Spiegel said in an analyst earnings call.