While Snap saw some gains at the end of 2017, the first quarter of 2018 came with a larger net loss, as the company’s revamped messaging app became widely available.
The company posted a net loss of $386 million, widened from $221 million in Q1 2017, though revenue was up 54 per cent to $231 million.
Revenue was down from the previous quarter ($286 million), which Snap blamed on “seasonality and our redesign”.
Daily active users jumped from 166 million in Q1 2017 to 191 million, although compared to the previous quarter they only increased 2 per cent. CNET reported this was the company’s slowest rate of user growth ever.
Referring to the revamped app, which faced some backlack from users, CEO Evan Spiegel said on an earnings call: “A change this big to existing behaviour comes with some disruption,” pointing out that “we are already starting to see early signs of stabilisation among our iOS users as people get used to the changes, but still have a lot of work to do to optimise the new design, especially for our Android users.”
“We are now focused on optimising the redesign based on our ongoing experimentation and learning,” he added.
Total advertising revenue for Q1 was $229 million, an increase of 62 per cent year-over-year.
On the call, CSO Imran Khan explained the three areas Snap is focusing on in this area: enhancing its advertising product suite; developing efficient tools for advertisers; and proving the effectiveness of its advertising.
It wasn’t just the redesign which attracted criticism: users pointed out an advertisement on the app made light of domestic abuse.
The company also pointed out revenue growth will probably slow substantially in the current quarter.