One of Facebook’s biggest competitors is swirling down the tubes:
Snap Inc. said its quarterly loss nearly quadrupled amid slowing revenue and user growth, sapped by intensifying competition from larger rival Facebook Inc.
The parent company of messaging app Snapchat said Thursday that revenue more than doubled in the second quarter to $182 million from $71.8 million a year earlier. Yet that growth rate was about half what it was in the first quarter, and slower than investors expected for a company that says it still has ample room to grow. Snap’s second-quarter loss ballooned to $443 million from $116 million a year earlier.
Snap’s incremental gain in daily users compares with the galloping growth Facebook saw for Instagram Stories, packages of ephemeral photos and videos that copy Snapchat’s “Stories,” one of its most popular features. Snap added 15 million new daily users in the first half of the year—of which 7.3 million joined in the second quarter—compared with Instagram Stories’ 100 million new daily users between January and June.
“Snap has gone from industry darling to troubled child overnight,” said Bryan Wiener, chairman of advertising agency 360i.
“We made a lot of great progress this quarter,” said Snap Chief Executive Evan Spiegel. He said user growth was “solid” and that the company is “still in the very early stages” of monetizing.
Snap’s stock was trading down 17% in after-hours trading, hitting new lows. Its stock has lost 44% since its listing in March to its close on Thursday at $13.77.