Published: Thu, May 18, 2017
Markets | By Noel Gibbs

Snap stock plunges in USA following earnings report

In the three months that ended March, Snap reported first quarter revenue of $149.648 million, which marked a rise of 286% year over year, compared to last year's mark of $38.798 million. Although Snap's revenue almost quadrupled to almost $150 million in the latest quarter, it's less than the $158 million that analysts polled by FactSet were expecting.

Snap reported a loss of $2.21bn for the first quarter, mainly due to stock-based compensation linked to the $24bn float in March. Its daily active users (DAU) increased 36% from 122 million t0 166 million year-over-year.

In addition, average revenue per user (ARPU) was up from $0.32 in the same quarter previous year to $0.90 in the first quarter.

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It was created to remove tariff barriers and facilitate the cross-border movement of goods and services among the three countries. In 2016, U.S. corn exports to Mexico totaled 13.3 million metric tons (523.5 million bushels) of maize valued at $ 2.5 billion.

On average, analysts were expecting first-quarter revenue of about $169 million, but Snap reported revenue of just $150 million.

During the earnings call, CEO Evan Spiegel, who some had speculated wouldn't be present, said that Q1 had seen the company focused on "working on the quality of the Snapchat application", especially on Android, where bugs had contributed to slowing user growth in Q4 2016. Analysts had been looking for faster growth of at least 40 percent, as an indication that Snapchat can retain its unique, young base of users. Its stock has dropped significantly as a result, and it is down more than 22 percent in after-hours trading. The firm found that 35 percent of Snapchat users do not use Facebook on a daily basis. He said, "The fact that they failed to live up to expectations, let alone exceed them, disappointed people". Both Instagram and Whatsapp, owned by Facebook, have copied many of Snapchat's features recently and has already surpassed Snapchat in daily users.

Snapchat grew quickly from its early days, but that growth has slowed considerably.

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Facebook Inc had also plunged after posting results for the first time in 2012, but has since ensconced itself as a Wall Street darling by transforming the company into an advertising giant.

"At the end of the day, just because Yahoo has a search box, it doesn't mean they're Google", he said, referring to Facebook's new camera feature with augmented reality - which puts the company in direct competition with Snap. Snap lost $2.31 per share, but was expected to only lose 21 cents.

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