It wasn't a great day for Snap stock. Perhaps due to the onslaught from the likes of Facebook and Instagram, Snapchat had its lowest pace of growth in years, as their parent company Snap Inc, missed Wall Street's expectations for its Q1 earnings, its first as a public company. The stock price was down 26.2% at the time of this post per Business Insider.
Snap had added 8 million new daily users in the first three months of the year. This time last year, the company was growing its DAUs by 52%. As mentioned above though, the slow growth is happening at a time when Instagram Stories outpaced Snapchat by hitting 200 million daily users.
The reasoning for Snap's net loss of $2 billion during the quarter was due in part to stock-based compensation that was related to its February initial public offering.
Other Notes from Snap's Q1 Earnings:
- EPS (adjusted): Net loss of $0.20 vs. $0.16.
- Revenue: $149.6 million vs. $159 million expected, up 286% from $39 million in the year-ago period.
- Daily active users: 166 million, an increase of 36% from 122 million in the year-ago period.
- Net loss: $2.2 billion.
Read more after the jump for highlights from the earnings call.
- CEO Evan Spiegel started Snap's first earnings call stating that the past quarter has been focused on "working on the quality of the Snapchat application," particularly as it relates to Android.
- 30% of new Snapchat users during the quarter were on Android, a jump from 20% in the previous quarter.
- Spiegel said Snapchat's recently announced search feature was "exciting" because it surfaces the “so-called long-tail of content on our service." Snapchat users can search for crowd-sourced stories based on a range of topics, from tourist attractions to concerts.
- 3 billion messages, or "snaps," get sent on Snapchat every day, inching up from 2.5 billion in the previous quarter.
- Spiegel wrapped his comments up by summing up Snap's Q1 work in three words: "performance, quality, and automation."
- When asked about Snapchat's slowed user growth, Spiegel gave some insight into why he doesn't believe in "growth hacking" like other social apps. Rather than send push notifications or emails to make them open the app regularly, he said Snap views growth “through the lens of creation" and "removing friction from the creative process” So if it can make Snapchat easier to use, people will use it more.
- Spiegel also said that poor internet access in less-developed parts of the world is "a real issue" for Snapchat's growth. Snap recently got into hot water in India over an alleged comment Spiegel made about not caring about "poor countries."
- Snap's approach to hardware like Spectacles is to “usually work on it ourselves" before seeking outside help, Spiegel said. He didn't give much more color beyond that hardware is an “interesting avenue to explore." (We know that Snap has looked at making camera drones.)
- Over 8 million people have tuned into Snapchat's original shows so far, Spiegel said. He said that while a lot of video content on mobile is repurposed from TV (cough: Facebook), Snapchat works closely with partners like A&E to create scripted shows specific to the app.
- Spiegel won't budge on specific new features or products that are coming down the road. “At this point, we’re pretty famous for not giving guidance on our product pipeline." Indeed.