Home / Tech News & Announcements / Snapchat slips in Q1 to its slowest user growth rate ever, shares fall 15%

Snapchat slips in Q1 to its slowest user growth rate ever, shares fall 15%

Snapchat face-planted in its Q1 2018 earnings report amidst a rocky redesign and sustained competition from Facebook, unable to keep up its comeback from last quarter. Snapchat reached only 191 million daily active users, up from 187 million, with its growth rate sinking to 2.13 percent — its slowest ever, compared to 5.05 percent in Q4 and a disastrous 2.9 percent in Q3. It pulled in $230.7 million in revenue with an adjusted EPS loss of $0.17. That’s compared to Wall Street’s estimates of $244.5 million in revenue and an adjusted EPS loss of $0.16. It seems that Snapchat’s sudden growth spurt last quarter was a fluke, with Snap adding just 1 million users in its core North American market this quarter. It’s actually worse than it looks. CEO Evan Spiegel wrote in his prepared remarks that compared to its 191 million users quarterly average, “our March average was lower, but still above our Q4 average.” The idea that Snapchat actually shrank last month should terrify investors. Snapchat is going to have ongoing trouble significantly increasing its user count with over 300 million daily users on Instagram Stories, and 450 million on WhatsApp Status — both clones of Snapchat. Wall Street hates weak user growth, and Snap’s share price fell about 15 percent in after-hours trading to $12. Snap’s losses grew to $385.7 million, up from $350 million last quarter. That’s another spot Snap was hoping to improve with cost-cutting layoffs, but those were too little too late. COO Imran Khan warned that “as we think about our year-over-year revenue growth rates, we are planning for our Q2 growth rate to decelerate substantially from Q1 levels.” That’s another reason investors are bolting. One of the few bright spots of the earnings report was the reveal of Snap Pro For Busines and Creators.

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Snapchat slips in Q1 to its slowest user growth rate ever, shares fall 15%

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