Snap added fewer users and made less money than Wall Street expected

Snapchat delivered another disappointing quarter on Thursday, adding fewer users and bringing in less revenue than Wall Street expected, and the stock dropped as much as 13 percent in early after-hours trading.

The relevant numbers:

• Snap added seven million new users for the quarter. It added eight million in Q1, and analysts were hoping for closer to 10 million new users in Q2.
• Snap reported a net loss of 16 cents per share on revenue of $181.7 million. Analysts were looking for a loss of just 14 cents per share on revenue of $186 million.
• Snap reported ARPU, or average revenue per user, of $1.05 on the quarter. That was less than analysts expected, and much slower year-over-year growth than the past few quarters. This is an important metric for Snap because the company says it’s a good indicator of its business growth — and a reflection of its strategy to push hard into more mature advertising markets.

These numbers are not what Wall Street was hoping for. The popular messaging company has been clobbered during its first six months on the public markets. Snap stock closed Thursday at $13.67, more than 44 percent below the $24.48 opening-day closing price for the stock back in early March.

Most of the concern with Snap has been related to Facebook and Instagram, which are both copying Snapchat’s best features and, in some cases, going out of their way to try and highlight that their user base is bigger and more engaged.

The fear is that Facebook’s efforts have dramatically hindered Snap’s growth, and it’s hard to argue otherwise. The company’s user growth started slowing down in the back half of 2016, and it’s already falling short of Wall Street growth estimates less than six months in.

The company will host a conference call with investors and analysts at 5 pm ET today. We’ll be listening in and updating Recode along the way.

This article originally appeared on Recode.net.

Will you support Vox’s explanatory journalism?

Most news outlets make their money through advertising or subscriptions. But when it comes to what we’re trying to do at Vox, there are a couple of big issues with relying on ads and subscriptions to keep the lights on:

First, advertising dollars go up and down with the economy. We often only know a few months out what our advertising revenue will be, which makes it hard to plan ahead.

Second, we’re not in the subscriptions business. Vox is here to help everyone understand the complex issues shaping the world — not just the people who can afford to pay for a subscription. We believe that’s an important part of building a more equal society. And we can’t do that if we have a paywall.

So even though advertising is still our biggest source of revenue, we also seek grants and reader support. (And no matter how our work is funded, we have strict guidelines on editorial independence.)

If you also believe that everyone deserves access to trusted high-quality information, will you make a gift to Vox today? Any amount helps.

One-Time Monthly Annual

$5/month

$10/month

$25/month

$50/month

Other

$

Yes, I'll give $5/month

Yes, I'll give $5/month

We accept credit card, Apple Pay, and Google Pay. You can also contribute via