Snapchat’s Revenue Soars 44 Percent Despite Losing Users After App Redesign

Snapchat’s Revenue Soars 44 Percent Despite Losing Users After App Redesign

Snapchat’s Revenue Soars 44 Percent Despite Losing Users After App Redesign

Saudi Arabian Prince Alwaleed Bin Talal announced Tuesday he's taken a 2.3% stake in Snap - a deal worth about $250 million.

The photo and video sharing app reported daily active users for the last quarter of 188 million, down from 191 million in the first quarter of the year. And while those on the Street were expecting the company to report a loss of 17 cents a share, Snap reported a loss of 14 cents a share, again bettering Wall Street estimates.

After a tumultuous first year as a public company, Snap is starting to show some stability, despite the slowdown in user growth. Snap stock was trading at just over $13 a share ahead of Tuesday afternoon's report, down from a 52-week high of $21.22.

Snapchat has more than 100 million monthly active users, the company said, even though that was typically a metric it never cared about.

Average revenue per user came in at $1.40, compared to $1.05 a year ago.

His investment comes about three years after he met Snap chief executive Evan Spiegel and chief strategy officer Imran Khan, when the two executives visited Saudi capital Riyadh. "It has been approximately six months since we broadly rolled out the redesign of our application, and we have been working hard to iterate and improve Snapchat based on the feedback from the community", he said.

Analysts, on average, had expected an adjusted a loss of 18 cents per share on revenue of $249.8 million.

The prince had previously been rumoured to be interested in investing in Snap prior to its IPO, though in 2015 a source told Reuters there were "no plans to invest".

In prepared remarks in a call with analysts, CEO Evan Spiegel attributed this drop-off to the app redesign: "While our Monthly Active Users continued to grow this quarter, we saw a 2 percent decline in our Daily Active Users". The main reason for this was the controversial app design change. Users spend an average of over 30 minutes on Snapchat every day, he added, and user retention for people older than 35 has increased more than 8 percent. Snap declined to estimate user growth for next quarter, but noted that third-quarter earnings have historically "trended down" for the company.

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