Snap Sees Big Uptick In Revenues, Daily Users Decline

Despite a respectable third-quarter revenue increase, Snap said the popularity of its flagship app continued to shrink Friday.

Revenue rose 43% to $298 million year-over-year, which helped the company narrow its net loss to $325 million.

Yet analysts were more interested in the revelation that Snapchat’s daily active users (DAUs) declined 1% -- from 188 million to 186 million -- over the past quarter.

Snap CEO Evan Spiegel blamed the decline on Snapchat’s subpar Android app -- adding that the company is eager to put out a superior offering.

“We have been developing a completely new version of our Android application to be lightweight, modular and performant,” Spiegel said on a Friday earnings call. “The Android community represents a global growth opportunity for us, and we are making good progress testing the application in select markets.”

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Spiegel declined to say exactly when the new Android app would officially launch.

Some analysts suggest that Snap’s quarterly decline in DAUs might not be such a big deal.

“Of course, some users may be leaving the platform because it has lost its novelty, which would prove to be a bigger long-term concern,” said Pivotal Research analyst Brian Wieser. “However, our current assumption is the platform can maintain a sizeable-enough base of users to provide the company with opportunities to improve the platform and sustain its position in the advertising market as a niche digital media platform.”

Year-over-year, Snapchat’s DAUs actually increased by about 5%.

Among other moves over the past quarter, Snap launched its original sShows, and serialized shows -- its first slate of exclusive scripted shows and docuseries.

The company also announced partner-curated “Our Stories” and added about 25 media partners to increase the volume and variety of content available on its Discover service.

Looking ahead, Snap expects fourth-quarter revenue to reach between $355 million and $380 million, which would represent year-over-year growth of between 24% and 33%.

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