Snapchat shrinks by 3M users to 188M despite Q2 earnings beat

The Stories War has officially killed Snapchat’s growth. In Q2 2018 earnings today, Snapchat’s user count shrank 1.5 pecent percent to 188 million this quarter, down from 191 million and positive 2.9 percent user growth last quarter. Snapchat beat on earnings per share with $262.3 million in revenue and a loss of $0.14 while Wall Street estimated an EPS loss of $0.17 with $249.8 million in revenue.

Snapchat is coming off of a disatrous Q1 earnings with its slowest ever user growth rate that led to a 24 percent plunge in its share price in May. But the company has been highly volatile, seeing a 37 percent boost in its share price after surprisingly positive Q4 2017 earnings.

The quarter saw Snapchat escape much of the scrutiny facing other social networks regarding fake news and election interference. Snapchat started running unskippable ads in its Shows that could be a big money maker if extended to Stories. It began experimenting with ecommerce in earnest, allowing brands to sell things people can buy without leaving the app. It also opened self-serve buying of its augmented reality lens ads that people not only post, but play with for extended periods of time. And it launched its privacy-safe Snap Kit developer platform in hopes that alliances and referral traffic would help revive its user growth.

But problematically, its competitors like Instagram Stories continued to surge, with it now having 400 million daily Stories users and WhatsApp Status now having 450 million. Combined, Facebook has over 1.1 billion daily (duplicated) Stories users across its family of apps. That reach could make it tough for Snap to compete for ad dollars.



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