Snap Shares Drop After Firm Reports User Loss In Q3

Snap, Inc. (SNAP) ended the week on a sour note on the stock market after publishing its earnings for the third quarter of 2018. The app maker’s stock price took a hit and slid to a new all-time low after the firm reported a loss of daily active users for the second quarter in a row, continuing what has been a difficult year for Snapchat.

The company’s earnings report was not entirely negative, as Snap reported a 43 percent increase in revenue. Its $298 million in revenue during Q3 beat analysts’ expectations, according to TechCrunch.

However, Snap also reported a loss of two million daily active users, from 188 million to 186 million. The number of total Snapchat users grew by 5 percent on a year-over-year basis, but dwindling DAUs and persistent worries about the firm’s sustainability led to another stock market slide on Friday.

The Snapchat app also lost three million DAUs in Q2.

Snap’s stock price dropped to as low as $5.77 per share before rebounding slightly by early Friday afternoon. Even with the rebound, it was down more than 12 percent from the day before with less than two hours before market close.

Things have been precarious for Snap ever since a highly controversial app redesign rolled out to all its users in early 2018. Its stock price steadily fell throughout the year, dipping below $10 per share in September. It has not recovered.

There are concerns about Snap’s cash resources, even as CEO Evan Spiegel detailed his ambitions to make the company profitable in 2019 in a recent note to employees. A recent internal survey of Snap employees found that a significant portion of the company’s workers did not plan on staying there in the long term.

That said, Snap has made moves to try and diversify its service offerings and bolster its business operations. The firm hired two new business executives this week, including former Amazon ad sales head Jeremi Gorman. She, along with fellow new hire Jared Grusd, will replace outgoing business executive Imran Khan.

Snap will hope to rebound in Q4 and in 2019 with a slew of new partnerships to bolster its namesake app. Snapchat recently got a line of original TV programming, with several new shows programming in the coming months. Users can also now use Snapchat to buy items they take pictures of on Amazon.