Tech

Snap Inc. (NYSE:SNAP) Posts Earnings Results, Beats Expectations By $0.13 EPS

Snap Inc. (NYSE:SNAP) Posts Earnings Results, Beats Expectations By $0.13 EPS

Snapchat picked up fewer users and less revenue in the second quarter than analysts had expected, sending shares of owner Snap Inc. tumbling Thursday afternoon.

During the quarter, daily active users grew from 143 million to 173 million, which represented an increase of 21% year-over-year. Snap also fell short of expectations for revenue.

Snap reported a loss of $116 million in the same quarter past year. Earlier this year, Snap began selling Spectacles to all USA consumers via its website, and in June, it began selling the wearable in Europe via its website and vending machines as well.

The company pulled in about $182 million in revenue, up from $72 million during the same period a year ago.

Average revenue per user (ARPU) was $1.05, up 109pc over 50 cents a year ago. The average user creates 20 snaps a day and Publisher Story views are up 30pc quarter-by-quarter.

Pitched as a fresh, daring alternative to Facebook, Snap garnered widespread attention when it went public in March, debuting at $17 per share.

With the lackluster results and stock price declining, Spiegel did promise not to sell any of his own shares in the company, a move usually reserved to instill confidence.

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Since introducing a Stories feature similar to that of Snapchat, Instagram has seen daily use of the feature rise to more than 250 million, eclipsing Snapchat's entire user base.

The company was formerly known as Snapchat, Inc. and changed its name to Snap Inc.in September 2016. Investors have been anxious about the volatility of the stock, with a post-IPO ban on employees selling shares expiring on Monday.

"Near-term issues hang on the stock, but we believe patient investors should look through the noise at the long-term opportunity", Jefferies analyst Brian Fitzgerald wrote in a note to clients.

Snap has not delivered on either front.

During the second quarter, Snap announced&nb sp;a two-year content-development deal with Time Warner.

Snap and Google working together could certainly be beneficial, not just to Snap but also to Google. BlackRock Inc. boosted its position in shares of Snap by 10.0% in the second quarter. Arguably not getting enough attention along the way: The impact of Facebook's dominant position in social media advertising is weighing on Snap's revenue growth the same way it has already weighed on Twitter Inc.'s. Its confirmed acquisition of the ad company Placed will be reflected in its third-quarter financials, as that deal was closed in July. And putting up massaged numbers is a better use of executives' time and energy than plotting how to get Facebook in trouble with antitrust regulators or keeping Spiegel in a security cocoon. Spiegel gave a non-answer, and the analyst was heard laughing and saying, "I didn't even understand his response" before his call was cut off.