The company’s losses ballooned to over $2.2 billion, but most of those were one time expenses related to stock bonuses paid out after a successful IPO. CEO Evan Spiegel got a sweet $750 million on his own. But even if you ignore that massive hit, Snap’s losses basically doubled. It burned through $104 million in cash in the first quarter of 2016, and lost $208 million during the first three months of 2017.
Snap reported its earnings for the first time since becoming a public company in March of this year. Its daily active user count clicked up to 166 million, a 5 percent increase over last quarter, up 36 percent from this time a year ago. That puts it behind Instagram Stories, a competitor launched by Facebook that copied heavily from Snapchat and has already passed 200 million users. It also means Snap hasn’t found a way back to the rapid growth it saw in years past.
Investors were not pleased with the slowing rate of growth, and the company’s shares were down nearly 25 percent in after-hours trading. Financially the company continued to increase its revenue, which grew nearly 300 percent to just under $150 million in the first quarter. Of that around $8 million came from sales of Spectacles, its one hardware product. But it’s still a long way from achieving a profit, and even then that revenue figure came in under Wall Street expectations of $158 million.
All the red flags that were present then continued to appear today, putting the company in the tough position. It will have to convince investors it can find ways to boost user growth or secure a path to profitability or its stock price will suffer the same fate as Twitter. That in turn can quickly make it difficult to attract and retain top talent.
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