Shares in Snap Inc. (NYSE:SNAP) plummeted after the close after the Snapchat app maker missed revenue and profit estimates and posted witheringly poor first-quarter results.
The results throw shade on Snap’s recent efforts to redesign its Snapchat app, which have not been lauded by some of its longtime users.
The future looks not so rosy as well as Snap’s year-over-year revenue growth is set to slow in the second quarter, said Drew Vollero, the group’s chief financial officer, due partly to a fall in advertising rates.
Shares of Snap shed 16% to US$11.87 in after-hours trade after the group reported that its total revenue for the quarter of US$230.7mln missed analysts’ expectations of US$244.5mln.
In the first quarter, Snap reported a loss of $0.17 cents per share, which was slightly more than the $0.16 cents per share expected by Wall Street. Its net loss, meanwhile, came to US$385.8mln compared with US$2.21bn in the year-ago quarter.
Its daily active users - a key metric for advertisers- also fell short of projections, coming in at 191mln versus the 194.2mln which had been expected.
Snap has remodeled its app and tacked on ad buying tools as it looks to compete with its rival Facebook which has unveiled some new features reminiscent of Snapchat’s on Instagram.