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Snap Inc. is better at monetizing its user base, but this number of loyal customers continues to shrink.
The social media company released Thursday financial results above expectations for its third quarter, but the
BREAK, + 6.07%
the number of daily active users has once again decreased, which corresponds to the expectations of analysts. The report arrived just hours after Twitter Inc.
tWTR, + 15.47%
also achieved final and final results before consensus.
Snap's shares plunged 10% in trading after normal playing hours after gaining just over 6% in regular session. Facebook Inc.
FB + 3.36%
and Twitter shares also declined during the extended session on Thursday.
Snap announced a net loss of $ 325 million, or 25 cents per share, compared with $ 443 million, or 36 cents per share, in the same quarter last year. On an adjusted basis, the company recorded a loss per share of 12 cents, up from 14 cents a year ago. Analysts surveyed by FactSet had predicted a loss of 14 cents per share.
Revenues increased to $ 298 million, up from $ 208 million in the same quarter last year. Total figure exceeded estimates by $ 283 million.
In its report on Snap's June results, the company surprised investors by signaling its first sequential decline in the number of daily active users. The number of SADs decreased further in September. Snap had 186 million daily active users in the third quarter, compared with 188 million in the previous quarter and 178 million in the first quarter. Analysts expected 186 million.
The company's outlook for the December quarter assumes another sequential decline in UA numbers, but Snap's management did not provide an accurate numerical forecast.
The CEO, Evan Spiegel, said on Snap's results call that the "rebuilding" of his Android app should contribute to the growth of the SAD, although Snap plans to "wait until everything is clear before deploying it widely. "DAUs, Spiegel, said that Snap brings performance improvements that reduce the amount of bandwidth used by the Snapchat app, and that the company hopes to gain ground to users over 34 in developed markets.
Do not miss it: why the exodus of leaders at Snap could actually be a positive
Many of Snap's monetization efforts are gaining momentum, according to the company's earnings release. The Snap Pixel, a way to measure the effectiveness of advertising, generated more than 230 million "buying events" in the third quarter, compared with 70 million in the second quarter. The company also launched its first "shoppable brand integration" in one of its original programs, and Snap said the placement helped sell Adidas Falcon sneakers.
Snap also launched two e-commerce advertising products. The company's "product catalog" option will make it easier for marketers to create ads from their existing catalogs, while its "collection ads" will allow Snapchat users to interact with four products in one place. advertising rather than just one. Snap said the first testers, including eBay Inc.
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significantly higher engagement rates with this format.
Tim Stone, chief financial officer, said on Snap's call that the company was "looking for better measurement, more optimization and greater relevance, while continuing to innovate formats for advertisers."
Snap shares fell 51% in the last 12 months, while the S & P 500
SPX, + 1.86%
increased by 5.8%.
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