“Snap Inc. Stumbles with $989M Quarterly Revenue; Brace Yourself for Second Quarter Woes”
Snap Misses Analyst Expectations for Quarterly Revenue and Second Quarter Outlook
Snap Inc., the social media company that owns Snapchat, has announced its first-quarter results, which have come as a disappointment for investors. The tech giant had missed analyst expectations by over $10 million – a significant shortfall. The company’s stock fell almost 20% in reaction to the results, as investors were left uncertain about the future of the social media platform.
The primary reason for the less-than-expected results has been attributed to the company’s struggle in adapting to changes in the social media landscape. Facebook-owned Instagram has aggressively replicated features of Snapchat, such as filters and stories, which has led to a loss in user engagement for the former social media giant. Snap has been unable to match the competitor’s marketing tactics, and this has resulted in a dip in user growth and engagement.
Snapchat’s daily active users also fell by two million from the previous quarter to 191 million, adding to investors’ worries. Revenue, however, did rise by 54% in comparison to the previous year, hitting the $231 million mark.
Looking forward, Snap has predicted that it could experience a significant slowdown in revenue growth for Q2 of 2018. The company reportedly expects to bring in $250 million to $260 million, which would be only slightly higher than revenue from the previous quarter. This speculation has prompted further concerns from investors regarding Snap’s future prospects.
Despite these challenges, Snap has been optimistic about the release of its new Android version coming later this year, which could help them regain their growth trajectory.
Key Takeaway:
1. Snapchat’s user growth and engagement has been impacted by the rise in popularity of competing social platforms, particularly Instagram.
2. Snap missed expectations for first-quarter revenue, resulting in a significant stock drop.
3. The company is predicting a slowdown in revenue growth for the upcoming Q2 quarter.
4. Snap remains optimistic about its new Android version release later this year.
