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Snap’s stock is tanking after poor user growth and Spectacles spectacle

Is Snapchat’s parent company steadily ceding ground to Instagram? Let’s look at the stock after today’s Q3 earnings report: I think it’s safe to say yes. Snap added only 4.5 million new daily active users this quarter, reporting a total of 178 million daily users—nearly 4 million less than estimates. No wonder Snap’s stock is … Continue reading “Snap’s stock is tanking after poor user growth and Spectacles spectacle”

Snap’s stock is tanking after poor user growth and Spectacles spectacle
[Photo: Furuncu/Anadolu Agency/Getty Images]
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Is Snapchat’s parent company steadily ceding ground to Instagram? Let’s look at the stock after today’s Q3 earnings report:

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I think it’s safe to say yes. Snap added only 4.5 million new daily active users this quarter, reporting a total of 178 million daily users—nearly 4 million less than estimates. No wonder Snap’s stock is down by more than 20% in after-hours trading.

In his prepared remarks for Snap’s earnings call, CEO Evan Spiegel noted that Snap’s user base grew “at a lower rate than we would have liked,” adding that its user growth was much higher in September than in the previous two months.

Snap’s Q3 revenue of $207.9 million also fell short of analyst estimates, by about $30 million, in part because Snap wrote off almost $39.9 million to account for excess inventory of Spectacles. The company reported a net loss of $443.2 million for the quarter.

None of that is exactly surprising. Wall Street has softened its expectations since Snap’s IPO this March, slashing revenue estimates month after month.

About the author

Pavithra Mohan is a staff writer for Fast Company.

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