Snap’s first quarterly results as a public company are in, and they make clear the company is struggling with revenue and user growth in the face of an onslaught from Facebook.
After telling investors in its S-1 document that daily active user growth had flattened during part of 2016, the company did little to reverse course, adding only 8 million daily active users in the first quarter of 2017, to reach 166 million.
In contrast, Snap’s Facebook-owned rival Instagram added 100 million monthly users in the four months between December 2016 and April 2017, to reach 700 million. And Instagram Stories, a knockoff of Snapchat’s popular Stories feature, is now used by more than 200 million people each day, according to Facebook.
Facebook’s clones of Snap’s features in Instagram, Messenger, WhatsApp, and Facebook proper appear to be putting a dent into the social upstart's ability to grow.
Snap’s revenue and profit numbers fell far below Wall Street expectations. Its first-quarter revenue of $149.6 million missed analyst expectations of $158 million. The company also lost a whopping $2.2 billion in the first quarter, much of which was tied to employee stock compensation and won't be repeated — but also a total more than it has made in its entire existence.
The numbers provided an instant report card on the company’s progress since its IPO in March. And Wall Street didn’t think too highly of its marks. The company sent its stock spiraling down nearly 25% in after-hours trading.