Snap shares tumble after it reports widening losses


Snap also missed its revenue estimates of US$185-million by just US$4-million this quarter.

While Snap earlier this year said that it "may never achieve or maintain profitability", the company reported deepening losses of $443 million, a 282 percent jump from last year's $115 million, in part on increased costs on research, sales and marketing.

But it wasn't all bad news. The business had revenue of $181.70 million during the quarter, compared to analysts' expectations of $186.49 million. Arguably not getting enough attention along the way: The impact of Facebook's dominant position in social media advertising is weighing on Snap's revenue growth the same way it has already weighed on Twitter Inc.'s.

The company did not hit Wall Street's benchmarks, sending the stock down as much as 10 percent during afterhours trading on the NYSE.

Daily active users: 173 million, down from 175 million expected.

As for Snap's $US443.1 million ($564.8 million) loss - for that kind of change, Spiegel could buy himself over 100 million hot dogs at $5 a piece on a nice day out. Investors have anxious that the app maker won't be able to grow its ad business in the face of mounting competition from Facebook.

Spiegel and Murphy's commitment to hold on to their shares will provide a slight boost of confidence for anxious investors, said James Gellert, CEO of RapidRatings, which assesses the financial health of companies.

"We've defended Snap since day one, but now need to see monetization moving in the right direction", Cakmak said.

The only reason Snap was able to go public in March with relatively little revenue, a scant track record and a insane rate of cash burn was that the company has been clever about repeatedly coming up with fresh ideas to keep its mostly young fans returning to the app.

Humanity has now watched Snapchat's animated hot dog gyrate and breakdance more than 1.5 billion times.

Stories created by Snapchat's Discover partners saw a 30% bump in viewership this quarter, per Spiegel.

The company hasn't put ads in Maps, which highlights the locations of a user's friends and interesting locales around the world. Vanguard Group Inc. now owns 8,353,729 shares of the company's stock worth $148,446,000 after buying an additional 1,601,170 shares during the period. Instagram began mimicking Snapchat's key features a year ago and boasts a much larger following - 250 million people daily use Instagram Stories, a feature developed by Snapchat that allows users to post disappearing pictures and videos for a 24 hour period. Spiegel said during the call that he and co-founder Bobby Murphy would not sell shares this year. The pair's post-IPO lockup will expire Monday.

"We believe deeply in the long-term success of Snap", he told analysts on a call after the results were released. Snap indicated that the pace of hiring could remain slower in the current quarter.