Snap loses 3m daily active users in second quarter but defies analyst expectations with revenue hike | City A.M.

Snap lost 3 million daily active users, an indicator of growth, in the second quarter of this year but defied analyst expectations with a revenue increase of 44 per cent to $262m.

Snap shares were volatile in after-hours trading, at one point increasing by more than 10 per cent before dropping to a more modest levels.

The figures

Snap defied analyst expectations of $251.2m in revenue to report Q2 revenue of $262m, up from $182m in the same quarter the previous year.

Net loss decreased 20 per cent to $353m in the second quarter. This time last year Snap made a net loss of $443m.

Average revenue per user surged to $1.40 from $1.05 a year ago.

Why it’s interesting

Snap appears to have come in from the cold with these results.

Nilufar Fowler, chief executive of Mindshare’s Worldwide Central, said Snapchat’s redesign announced in January has “clearly started to have some positive impact” for the advertising-dependent platform.

“Separating ‘friends’ and ‘brand’ content in the redesign always risked upsetting advertisers, this performance, at least for now, shows that advertisers still see value.”

However, she warned: “Whilst revenues may be up, the drop in Snapchat DAUs will be worrying if it is more than just a blip, especially if the drop is due to competition from Instagram.”

What Snap said:

Chief executive Evan Spiegel said: “We are excited by the progress we have been making and are optimistic about the opportunities ahead as we continue to invest in innovation.”