Revenues for the quarter rose by an impressive 286 per cent but still fell short of forecasts by around $9m, and the company's adjusted loss of $188.2m was higher than expected.
Snap disappointed analysts with reported revenue of $149.6m in the three months ending in March. The company had aimed to accrue a further two million new users. That's an increase of 36% over year-ago levels but only a 5% gain from the previous quarter.
Snap (SNAP) shares plunged 21 percent in after-hours trading after the social media company's debut earnings report as a public company left investors unimpressed. CEO Evan Spiegel received a $750 million bonus for the IPO.
"The more that we can remove friction from this creative process, the more that people want to use this service, and that's our strategy", Spiegel said.
Unfortunately for its shareholders, SNAP stock missed that mark too. The company has sharply divided the bulls and the bears, with bulls pointing to the company's popularity among teens and scalability, while bears have pointed to the the company's lack of profits, and weak growth in its user base. Snap calculates its ARPU as quarterly revenue divided by the average Daily Active Users.
Snap emphasized on a call with analysts Wednesday that its users were spending more time than ever on Snapchat, as it seeks to convince investors that loyalty to its products matters more than the size of its user base.More news: Here's How Goldie Hawn Responded When First Meeting Amy Schumer!
"Snap user growth is nearly zero".
And the cycle continues, as Facebook won't be far behind in copying that, too. Most recently, Facebook, which owns Instagram and once upon a time offered $3 billion to buy Snapchat, announced that Stories reached 200 million daily active users. We've seen this happen a lot in technology. Then he took a dig: "Just because Yahoo has a search box doesn't mean they're Google".
Snap's disappearing photos are strangely appropriate for the volatility of its CEO's wealth. Indeed, eMarketer projects that most of the Snapchat's usage gains in the USA going forward will come from older users.
Most of Snap's revenue came from advertising but there was also $8.3 million in an "other" category primarily driven by Spectacles - Snap's internet-connected glasses with a built-in camera.
Still, the current rivals of Snapchat have managed to outpace it.
The report, released after markets closed, is the first from Snap since the company went public in March.