Snap sees users drop for first time in Q2; sales beat estimates

Prince Alwaleed bin Talal has acquired a 2.3 percent stake in Snapchat in a deal worth $250 million (SR950 million). Daily users of the photo and video messaging app fell for the first time in the company's history, to 188 million in the second quarter from 191 million in the first.

Shares of Snap initially dropped, then jumped as high as $14.90 in extended trading following the report, after climbing less than 1 percent to $13.12 in NY.

For the three month period from April through June, Snap's revenue rose 44% year-over-year to $262 million.

Snap on Tuesday reported higher-than-expected quarterly revenue but its first-ever drop in daily Snapchat users.

Shares of Snap bounced between gains and declines in extended trading following the report, after climbing less than 1 per cent to US$13.12 in NY.

Snap lost $353 million in the quarter, or 27 cents per share, less than the loss of $404 million, or 31 cents per share, analysts had projected.

The company also shared metrics for monthly active users for the first time, reporting 100 million MAUs in the United States and Canada. "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 our community". Since going public in March 2017, Snap has missed analysts' sales projections most quarters.

His investment comes three years after he met with Snap CEO Evan Spiegel in Riyadh to "explore future investment and business opportunities", according to a statement he released Tuesday. The company is expecting revenues of between $265 million and $290 million for the quarter, and an EBITDA loss of between $185 million and $160 million. Snap declined to estimate user growth for next quarter, but noted that third-quarter earnings have historically "trended down" for the company.

Spiegel said Snapchat's drop in daily users "was primarily driven by a slightly lower frequency of use among our user base due to the disruption caused by our redesign".

Since then, the company has also launched a second-generation pair of its Spectacles, camera-enabled sunglasses that can upload content directly to Snapchat, in an attempt to diversify beyond software.

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