Early this month, social messaging service Snap (NYSE: SNAP) reported its second quarter results that beat estimates. However, the market is diappointed with the sequential decline in the number of its daily active users.
Snap’s Financials
For the second quarter of the year, Snap’s revenues grew 44% to $262 million, beating the analyst estimate of $250.4 million. The company ended the quarter with a net loss of $353 million, down 20% from net loss of $443 million a year ago. Non-GAAP diluted net loss per share was $0.14 versus analyst estimate of loss of $0.17 per share.
Among other metrics, daily active users (DAU) were 188 million, up 8% from 173 million a year ago and down 2% from 191 million a quarter ago. The market was looking for 192 million DAU for the quarter. Snap’s average quarterly revenues per user (ARPU) increased 34% to $1.40, compared with $1.05 a year ago, and beating the market’s forecast of $1.30.
Snap also issued its first revenue guidance. For the third quarter, it expects revenue between $265 and $290 million or a growth between 27% and 39%. Adjusted EBITDA loss is expected to be between $(185) million and $(160) million, compared to $(179) million in Q3 2017.
Snap’s New Offerings
During the quarter, Snap introduced Group Video Chat that allows video chat with up to 16 friends at one time.
Snap also introduced Lens Explorer that makes it easy to discover and unlock Lenses built by Snapchat users around the world. Since the launch of Lens Studio in late 2017, creators have submitted over 100,000 unique Lenses that have been viewed by Snapchat users over 3.5 billion times.
It also ventured into augmented reality with Snappables, new Lenses for sharing augmented reality experiences with one or many friends. Users can control Snappables using touch, motion, and facial expressions.
Snap has also released a new version of Spectacles, which has a smaller profile and is water resistant. Users can record videos with improved audio as well as press and hold to take a photo. Snaps captured transfer to Snapchat in HD up to 4 times faster than the original version of Spectacles.
