Snap Inc on Tuesday reported higher-than-expected quarterly revenue and Snapchat gets a ‘royal’ boost but its first-ever drop in daily Snapchat users. Saudi Arabia’s Prince Alwaleed bin Talal announced soon after the second-quarter results that he had finalized a $250 million deal in May to buy a 2.3 percent stake in Snap.
Shares in Snap climbed more than 12 percent in after-hours trading before reversing course. They were last down about 1 percent. Snapchat gets a ‘royal’ boost Snap has been working to convince big advertisers to spend more of their budgets on Snapchat ads and reach the app’s base of mainly 18-34-year-old users, and it beat analyst revenue forecasts as it drew in more international and small business advertisers.
But daily Snapchat users fell to 188 million in the second quarter from 191 million in the prior quarter, Snap said, which could heighten investor anxiety about how competition and privacy issues are affecting Snap and its peers.
Snap has been redesigning its app to encourage users to interact with more of its ad-supported videos. Chief Executive Evan Spiegel said in prepared remarks that the redesign was the primary reason for usage slipping, but he credited the changes for increasing viewership of key ad-supported content this year and Snapchat gets a ‘royal’ boost.
Snapchat gets a ‘royal’ boost :
“We believe that this is an important evolution of our product that will help drive future growth in engagement,” he said. “Our users continue to spend an average of over 30 minutes on Snapchat on a daily basis.”Snap had never before logged a quarterly drop in daily users, according to data it has released going back to 2014. Snapchat gets a ‘royal’ boost Analysts on average expected Snap to gain nearly 2 million users in the second quarter from the first quarter, according to Thomson Reuters I/B/E/S.
The company said it set a record for monthly users but did not disclose the figure. Snap’s user growth has pulled back sharply over the past two years. Much larger rival Facebook Inc has replicated Snapchat features like Snapchat gets a ‘royal’ boost such as virtual animal ear filters for selfies and the “stories” format for sharing content. A Snapchat redesign in February aimed at encouraging users to watch more videos prompted user protests after they found it more difficult to find the content they wanted. Snap in first-quarter results said it would again adjust how it presents content.