Snap loses 3 million daily users in Q2, but beats revenue expectations

Jamie McCarthy  Getty Images for Tribeca Film Festival

Jamie McCarthy Getty Images for Tribeca Film Festival

Last quarter, its stock dropped by as much as 24% after releasing its Q1 earnings report.

The earnings report didn't have any specific sales figures for its latest Spectacles hardware, though it did report $2 million in non-advertising revenue.

Snapchat ended the quarter with an average of 188 million daily active users, compared to 191 million at the end of Q1.

Snap on Tuesday reported higher-than-expected quarterly revenue but its first-ever drop in daily Snapchat users.

Separately, Saudi billionaire Prince Alwaleed Bin Talal said he invested $250 million for a 2.3 percent stake in the social-media company. It reported an adjusted loss of 14 cents a share, which was better than the average analyst expectations of a 17 cents a share loss, according to surveys by Thomson Reuters. After initially shooting up more than 10 percent following the unexpected revenue beat, it then dipped to below its closing price before ticking back up slightly. The company is expecting revenues of between $265 million and $290 million for the quarter, and an EBITDA loss of between $185 million and $160 million.

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For the three month period from April through June, Snap's revenue rose 44% year-over-year to $262 million.

"We have been working hard to iterate and improve Snapchat based on the feedback from our community", Evan Spiegel said on a call.

Analysts on average expected Snap to gain almost 2 million users in the second quarter from the first. It will be interesting to see if this trend of desiring privacy in the modern era will continue, or if Facebook and Twitter are just waiting to pounce. Snap recently appointed a new chief financial officer, Tim Stone, who was previously at Amazon.

Shares in Snap climbed more than 12 percent in after-hours trading before reversing course and going flat. Chief Executive Evan Spiegel said in prepared remarks that the redesign was the primary reason for usage slipping, but he credited the changes for increasing viewership of key ad-supported content this year.

Ahead of the release of the results on Tuesday, the self-described camera company warned year-over-year growth had slowed down "significantly" from the first quarter's 54%.

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