Published: Wed, August 08, 2018
Business | By Tara Barton

Snapchat loses three million users in three months

Snapchat loses three million users in three months

According to Spiegel, new Snapchat users are primarily using Android, and it's been trying to completely rewrite its Android app for over a year now. It also recorded a narrower loss per share than analysts expected.

Snap Inc on Tuesday received a vote of confidence from a billionaire investor and reported record revenue from outside North America, factors that helped soften the blow of its first-ever drop in daily users.

On the upside, the company reported second quarter revenues of $262.3m against analyst estimates of $249.8m, up 44% over the same period previous year, and a loss of $0.14 earnings per share against a loss estimate of $0.18.

The company also shared metrics for monthly active users for the first time, reporting 100 million MAUs in the United States and Canada.

Evan Spiegel, Snap's CEO, blamed much of the poor results on an unpopular redesign that was released six months ago that was so unpopular social media influences like Kylie Jenner openly expressed their disappointment.

Snapchat's controversial redesign has sent users running for the exits.

Snapchat has experienced a string of declines after lackluster earnings reports since going public in March 2017.

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The Los Angeles-area company beat Wall Street's expectations for both revenue and losses, and its share price surged by more than 13% on the news in after-hours trading to almost $15, before briefly stabilizing around $14 - an overall gain of about 6%.

The company has struggled with a rocky redesign widely criticized by users.

Snapchat responded with a few design tweaks to appease users, such as making it easier to find Stories.

Meanwhile, Snapchat's chief competitor Instagram continues to soar.

Its results come at the tail end of a brutal earnings season for Silicon Valley, which saw huge chunks torn off the valuations of Twitter and Facebook following disappointing numbers. Facebook suffered the single biggest wipeout in stock market history following its earnings report.

Saudi Arabia's Prince Alwaleed bin Talal, a well-known tech investor, announced on Tuesday that he had invested $250 million into the company, in return for a 2.3% stake. He made the $250 million investment on May 25.

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