Snap Sees Big Uptick In Revenues, Daily Users Decline
- by Gavin O'Malley @mp_gavin, October 26, 2018
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.”
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%.
