The company has not been growing well for some time now, and now for the first time is losing daily active users, dropping from 191 million in the first quarter of the year, to 188 million in the last quarter. And while those on the Street were expecting the company to report a loss of 17 cents a share, Snap reported a loss of 14 cents a share, again bettering Wall Street estimates. Last quarter, its stock dropped by as much as 24% after releasing its first-quarter earnings report.
Snap said Tuesday that third-quarter revenue would be $265 million to $290 million.
Despite his relatively large stake, Prince Alwaleed won't get any say in how Snap is run.
On Thursday, the businessman announced a $267 million deal to buy newly issued shares in the Dutch music streaming service Deezer through his Kingdom Holding investment company and Rotana Group, the entertainment company he also owns.
Despite this, it grew average revenue.
Its revenue was $262 million (around Rs. 1,800 crores) in the second quarter, beating the average estimate of $250.43 million (roughly Rs. 1,700 crores), as average revenue per user surged to $1.40 (roughly Rs. 96) from $1.05 (roughly Rs. 72) a year ago. "The number of people that watch Publisher Stories and Shows on iOS every day has grown by more than 15 percent this year", said Spiegel.
Snap did reveal that 11 of its Shows now have a monthly audience of over 10 million users, which is up from the 7 million in last quarter.
"We have been working hard to iterate and improve Snapchat based on the feedback from our community", Evan Spiegel said on a call.
Snap's stock was all over the map following its earnings.
Analysts, on average, had expected an adjusted a loss of 18 cents per share on revenue of $249.8 million. "We saw and continue to see Snap as a niche platform".
The prince had previously been rumoured to be interested in investing in Snap prior to its IPO, though in 2015 a source told Reuters there were "no plans to invest". He also chairs the Kingdom Holding Company. Chief Executive Officer Evan Spiegel defended his strategy, saying that while the redesign was the primary reason for fewer daily users, "we believe that this is an important evolution of our product that will help drive future growth in engagement", according to his prepared remarks.