Facebook destroyed its earnings Wednesday.
It posted 59% revenue growth, a 63% growth in ad revenue and 180% growth in earnings per share compared to last year.
But, despite that growth, a big measure of engagment for Facebook was actually down last quarter. The ratio of daily active users to monthly active users fell by .5% in the US and .2% in Europe, indicating that fewer people are logging in daily.
It’s the first time in nearly four years that the ratio has fallen.
“It is worthy of a call-out since we are looking for early evidence of usage transitioning to Snapchat,” Brian Pitz, analyst at Jefferies, said in a note to clients.
Facebook responds by saying that the time spent per user is up by double digits.
“Snapchat could impact 3-9% of Facebook 2018 earnings per share,” Pitz said. “And that we could see the (minimal) impact beginning as early as the fourth quarter.”
Snapchat grew it’s users by 50% in 2015, and reaches 41% of the 18-34 year old demographic in the US each day, according to the service.
The core of Facebook’s social platform is probably sheltered from Snapchat’s rise, as the two platforms serve different purposes. But Instagram, Facebook’s photo sharing platform, might not be so lucky.
Still, it could be an early indication that users are looking for an alternative to Facebook.
Pitz still rates Facebook a buy, and actually raised his price target by $10 to $170, which means any impact Snapchat will have on Facebook is still several quarters away at least.
But it’s never too early to start looking for potential risks for a company.
Facebook shares are up 33% this year, and opened Thursday at $127.52.