Snapchat parent shares plunge after debut earnings

Snapchat owner Snap's shares took a dive after the company reported a $2.21bn (£1.71bn) net loss in its first earnings report as a public company.

Snapchat parent shares plunge after debut earnings

The social messaging and camera company reported 286% growth in revenue to $149.65m, which fell short of analysts’ expectations.

In US after-hours trading Snap’s shares closed at $22.98, falling close to 25% in value. Snap was valued at $28bn at its initial public offering in March.

The heavy losses were due to compensation to Snap’s staff after the IPO. 

Daily active users grew from 36% year on year to 166 million in the first quarter of 2017 (ending 31 March).

In an earnings call with investors, Snap chief executive Evan Spiegel said the company had focused on the performance and quality of its Android app and automating its advertising business, the Financial Times reported.

In the UK, Snapchat lost almost 1.9 million visitors (a 30% decline) and now reaches 4.3 million people, according to research by Verto Analytics. However, 338,000 were added among the 18-24 age group (a 20% rise). The 18-24 age group now accounts for nearly half (47%) of Snapchat’s audience in the UK. 

Dr Hannu Verkasalo, Verto Analytics’ chief executive, said: "Snap’s lukewarm IPO shows the company has yet to prove its worth to investors as a profitable social media platform based on monetisation metrics.

"However, in terms of user metrics, it's established itself as one of the more successful new entrants in the social space over the last ten years – overtaking even Twitter with hourly and daily audience."