Snap shares crumble 15% after poor quarterly report
The company lost 17 cents a share for the three month period, which ended in March. That was in-line with Wall Street forecasts. Revenue came in under expectations at $230.7 million. Daily Active Users reached 191 million, and the average revenue per user was $1.21. The DAU figure was up 15% from last year's first quarter, but up only 4 million or 2.1% from the fourth quarter of 2017.
Snapchat suffered mightily when it changed its UI, and while some users left for Instagram and other apps, others created a petition on Change.org demanding that the old interface be brought back. Ironically, the company has started testing another redesign that brings stories from a user's friends and family back to the same place where content from celebrities, brands, media and publishers can be found. Splitting up the two set off the brouhaha in the first place.
Last week was an eventful one for Snap. Besides testing the new redesign, the company launched a series of games using its Lenses AR technology. Called Snappables, users can "put on their game face" and play a game of basketball, join a rock band, or play an aliens game. One new game will be added each week.
Lastly, the company introduced its updated Spectacles video recording glasses. Now water resistant, the glasses record in a higher HD resolution and are priced $20 higher than the first-gen version at $149.99. Even though the company sold 220,000 of the OG glasses, more than expected, it still had to take a $40 million charge in the third quarter of 2017 due to high inventory levels. To combat this, the company has done away with its roaming vending machine and will sell the wearable through the Spectacle.com website only.
Snap's shares closed the 4pm regular session of trading on the NYSE at $14.13. After-hours, when the quarterly report was released, the stock dropped $2.00 or nearly 15% to $12.13 a share.