Rest in peace, Snap. We hardly knew ye.
The company’s first earnings report as a public company was the disaster many had feared as the company fell well short of revenue projections and reported only modest user growth.
Investors responded by beating Snap’s stock with an ugly stick, driving it down 25 percent in after-hours trading.
The company reported revenue for the quarter of $149.6 million, well below the consensus analyst estimate of $158 million for the quarter and a loss per share of $0.19. That revenue was up 286 percent from the $38.8 million in reported in the same quarter one year ago. But that comparison is largely irrelevant to investors because Snap’s monetization efforts were still in early stages a year ago.
Daily active users grew from 122 million in Q1 2016 to 166 million in Q1 2017, an increase of 36 percent year-over-year. But investors are more freaked out that DAUs only increased 5 percent from the 158 million last year. That’s slightly better than the 3.3 percent growth last quarter.
But for a company that some had feared was already massively overvalued, such a weak performance carries such a stench of disaster that investors were pushing its stock down close to the IPO price of $17.
It appears Facebook’s strategy of sitting on Snap’s face and smothering it to death by copying its features across of its products is working to perfection.
We now must wait to see if Snap executives can make the case in their earnings call that it’s not quite time yet to place pennies on the company’s eyes.