Snapchat added fewer users than Wall Street expected, leading to a 14 percent plunge in premarket trading to $11.74, CNBC reported. The declining numbers are a reflection of the company's inability to continually increase its user base. This quarter, Snapchat added 7 million users during the second quarter, compared to the 8 million added in the first quarter.
Snapchat was fundamentally a place for kids to hide from adults. Much less, marketers and Wall Street. What else was going to happen? pic.twitter.com/0FPkl9A7Sj— Raymond Pirouz (@raymondpirouz) August 11, 2017
In terms of total revenue, Snapchat brought in $181.7 million. A Thomson Reuters consensus estimate initially projected the company to generate $186.2.
During an earnings call on Thursday, 27-year-old CEO Evan Spiegel appeared to voice his frustrations about his company's slow growth, Ad Age noted. Despite the lackluster results, Spiegel vowed not to sell any of his own shares--a move typically reserved to instill confidence.
"Bobby and I will not sell any of our shares this year," Spiegel said, also referring to his co-founder Bobby Murphy. "We believe deeply in the long-term success of Snap."
If anything, Snapchat's low quarterly earnings highlight the cut throat competition in Silicon Valley, where industry giants like Facebook and Google continue to drive the market. The recent earnings report are only the second since the company went public in March.