Snapchat is the California based social media network with 186 million daily active users right now; it loses 2 million daily active users in the third quarter of year 2018. In the second quarter the network has about 188 million daily active users and down 1 percent from 186 million in the second quarter of the year 2018.
But the interesting part of the story is this social media firm shattered the Wall Street expectations on the financial flank. It is true that the net loss in the posting is about $325 million but there is an improvement of $118 million if we made a comparison to the preceding year quarter. Revenues were $298 million that makes a record and it’s up 43 percent. Total adjusted earnings per share were minus 12 cents.
According to the analyst, they expected that the Snap Chat firm will earn revenue of $283 million and adjusted earnings per share were minus 12 cents. It was also written by the analyst that they expect the stock will down about 3 percent. These expectations were beaten by the Snap Chat but they lose 2 million daily active users.
CEO Evan Spiegel remarks
Snap chat CEO Evan Spiegel admitted the loss of 2 million daily active users and he explained that the loss was mostly on the Android. Snap Chat is not as smooth and good on Android as it works well on the iOS. Moreover he added that the firm has an implausible influence amongst our fundamental demographics of 13 to 34 years old in the United States and Europe. But there are billions of people in the rest of the world who do not use this platform.
Spiegel said that they are trying to increase the number of users in the developing world with the improvement in the Android app to restore momentum. This time they are trying to influence the older users in the network. But the difficulty is the attraction for the old age group users may insight their younger users because they might be sensitive with the presence of their parents or teachers on the app. About the Android overhaul’s schedule the CEO replied that time is required to improve the quality of app on Android. He said we are going wait till we get it right.
He further said that the stock fall is discouraging for the investors because the snaps created per day decreases from 3.5 billion to 3 billion per day. But they are trying to assure their investors because 60% of users are still creating snaps everyday on the app. The firms stretch goal was break-even in the year 2018 and they are planning for full-year profitability in 2019.
Difficulties for the firm
This year company also losses many top executives of the firm with their users. Chief Strategy officer of Snap Chat Imran Khan was influential in leading the company through its initial public offerings in 2017. Snap chat announced that they hire Jeremi Gorman as chief business officer (former Amazon sales executive) and Jared Grusd as Chief Strategy officer (former Huff post CEO).
This year there were made some changes in Snap Chat design to make a separation between messaging and published content. This new design made many users upset and frustrated. But according to Spiegel with the redesigning more people are watching the premium content on the app as with the change they introduces a slate of new scripted series. It may help to attract the users to come back for more.
According to the Piper Jaffery fall 2018 survey instagram is the most used app on the social platform. About 85 percent of youngsters are using face book owned social media platform. At that time the biggest competitor for the Snap chat is instagram that is attracting their daily active users on their app.