Snap, the parent company of the messaging app Snapchat, lost 17 cents per share on revenue of $US230.7 million during the first quarter, the company reported on Tuesday following the close of trading.
The company’s revenue missed analyst expectations by 6%, exactly the kind of performance the company did not need. Snap’s CFO Drew Vollero provided more gloomy news.
“We are planning for our Q2 growth rate to decelerate substantially from Q1 levels,” Vollero said, “with growth in auction impressions, partially offset by pricing for both Snap Ads and Creative Tools.”
In after-hours trading, the stock plummeted as low as 17 per cent. Shares closed regular trading down slightly to $US14.13. Before Tuesday, Snap’s shares had fallen 33% since a February high of $US21.22.
Here’s what analysts had expected from the Venice, CA-based Snap:
- A loss of 17 cents per share
- Revenue of $US243.55 million
Daniel Ives, an analyst with GBH Insights, sized up the company’s situation this way: “Any hopes of profitability in the near term appear to be out the window…We view 1Q as a major setback in gaining credibility with the Street.”
For the same quarter last year, Snap reported a loss of 20 cents per share on revenue of $US149.65 million. The company has seen three rounds of layoffs just this year. The most recent came in March when Snap laid off 100 employees, mostly from the sales division.
Some of the improvements the company reported included a net loss $US384. 2 million, which was 82% slimmer from the $US2.2 billion net loss reported for the same period a year ago.
Snap’s management also said that daily active users grew from 166 million in Q1 2017 to 191 million in Q1 this year, a 15% increase. But Snap only picked up 4 million new users during this quarter, less than half of the 8.9 million new users the company reported in Q4, 2017.
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