Snap Inc. Misses On Revenue In Q1

Snap Inc. Misses On Revenue In Q1

Snap Inc. Misses On Revenue In Q1

The company reported a $US2.2 billion loss (compared to its loss of "only" $US515 million for the whole of last year) on revenue of $US149 million.

Even as he was faced with the challenging prospect of confronting an angry mob of investors and analysts, however, Snap CEO Evan Spiegel still found time to throw shade at Facebook. The company however is no where close to achieving profitability.

"The No. 1 question we receive about Snap is can it sustain its user growth and how big can it be", Ralph Schackart, an analyst with William Blair, wrote in an investor note this month.

While the company did see revenue losses, it also saw an increase in daily active users.

"If you want to be a creative company, you have got to be comfortable with and basically enjoy the fact that people copy your stuff", Spiegel said.

Recently, reports started flooding in that Instagram's massive presence in the global market is stifling growth for Snapchat.

Its daily active user count did increase about 5 percent from last quarter, and 36 percent from previous year to 166 million, but that is still well short of Instagram Stories, a clone that Mark Zuckerberg says has more than 200 million users. Snap's user growth, it states, will be key to watch going forward.

Snap posted revenue of $149.65 million, up close to 300 percent over this time past year, and annual growth in the number of daily active users of 22 percent to 166 million users.

Snap ended the quarter with $3.24 billion in cash, cash equivalents, and marketable securities.

Measured per user, revenues were three times higher than in the same quarter past year but 14% lower compared to the previous three months.

It wasn't just the Snaps that were disappearing on Wednesday. A new feature called "magic eraser" allows Snapchat users to tap the scissors icon and the stars icon, and remove something unwanted from a photo.

The question has been whether Snap can quickly grow its user base and, in time, turn a profit.

With its first earnings results, Snapchat risks suffering the same fate as its social media rivals. "Just like how Google forced companies to develop their own search strategies, Snapchat is forcing competitors to develop a camera strategy", he added.

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