Snap Reports First Drop in Snapchat Daily Users, Saudi Prince Takes Stake

Snap will report quarterly results today Facebook and Twitter’s debacles cast a shadow

Daily users of the photo and video messaging app fell for the first time in the company's history, to 188 million in the second quarter from 191 million in the first. It also recorded a narrower loss per share than analysts expected.

Revenue aside, Snapchat's daily active user base declined for the first time.

Meanwhile, Snapchat's chief competitor Instagram continues to soar. The redesign was widely considered a bust, with famous and everyday users complaining about the confusion caused by the new placement of some of their favorite features.

At the end of a savage technology-sector earnings season, which saw Twitter and Facebook badly mauled after reporting poor numbers, Snapchat's anaemic performance was explained away as a redesign issue by CEO Evan Spiegel in prepared remarks with analysts. "It has been approximately six months since we broadly rolled out the redesign of our application, and we have been working hard to iterate and improve Snapchat based on the feedback from our community".

There was a small silver lining, too.

Snap has been working to convince big advertisers to spend more of their budgets on Snapchat ads and reach the app's base of mainly 18-34-year-old users, and it beat analyst revenue forecasts as it drew in more global and small business advertisers.

Snapchat has experienced a string of declines after lackluster earnings reports since going public in March 2017.

This appeared to confuse the market initially, who rallied behind Snap's share price initially in after-hours trading, but it seems likely this will only be a temporary reprieve before the company gets purchased by AOL, like all eventually defunct web brands.

Snapchat responded with a few design tweaks to appease users, such as making it easier to find Stories.

Even before its earnings report, news shot around the internet that the social network had failed to properly lock down its iOS app, leaking portions of the source code to its app.

Prince Alwaleed bin Talal, the Saudi investor, disclosed a $250 million stake in Snap last night as the company reported an unexpected decline in users of its Snapchat app.

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