It’s deja vu all over again.
Almost exactly 6 months after Snapchat reported abysmal Q1 earnings – its first since going public – which crushed its stock, the company has done it again reporting earnings that disappointed on every single metric, and missed across the board with revenues and users failing to meet Wall Street expectations, cash burn remained ridiculous, while net loss tripled to a whopping $443MM from $124MM one year ago.
Here is the Q3 breakdown:
But the main reason the stock is getting pummeled, is that Daily Average Users rose from 173 to 178 million, missing expectations of 180.5 million
Even scarier, CEO Evan Spiegel said in a statement Snap’s currently redesigning the application to make it easier to use, which has a “strong likelihood” of disrupting business in the short term.Spiegel also warned that he doesn’t yet know how the behavior of SNAP users will change when they begin to use the updated app
One thing that we have heard over the years is that Snapchat is difficult to understand or hard to use, and our team has been working on responding to this feedback. As a result, we are currently redesigning our application to make it easier to use. There is a strong likelihood that the redesign of our application will be disruptive to our business in the short term, and we don’t yet know how the behavior of our community will change when they begin to use our updated application. We’re willing to take that risk for what we believe are substantial longterm benefits to our business.
