The market value of Snap Inc. is disappearing faster than the photos on its app.
The Snapchat parent company's stock price plunged after-hours on Wednesday after the company reported first quarter earnings with lower revenue and wider losses than Wall Street was anticipating. It was the company's first time reporting quarterly earnings since going public in March.
Snap reported that first-quarter revenue was nearly $150 million, up 286 percent from the same period last year when the company's moneymaking efforts were much smaller and it brought in just under $39 million in revenue. Net losses widened to $2.2 billion from $105 million year-over-year. The majority of the losses were attributed to stock-based compensation associated with the company's recent IPO.
Wall Street was expecting revenue of $158 million and net losses of $2 billion.
The company grew its daily active user base to 166 million, up 8 million, or 5 percent, from 158 million last quarter. The company's quarterly user growth slowed last year in part due to increased competition from Facebook-owned Instagram. The company added more users this quarter than it did during the fourth quarter of 2016, when it grew by just 5 million DAUs. But it hasn't rebounded to when it was adding DAUs in the 10 million-20 million range each quarter.
Snap also reported that its users spend 30 minutes a day on average using the app and create 3 billion Snaps each day.
The majority of Snap's business comes from the advertising it sells around curated Stories and the channels run by publisher partners on Discover. Snap's other business division, which includes its camera-enabled glasses called Spectacles, brought in around $8 million in revenue.
Snap shares closed the day down 1.5 percent, or 36 cents, to $22.96. They were trading down significantly, at some points by more than 25 percent, during after-hours trading on the NYSE.
A conference call with executives did little to allay investor concerns. The stock was down 23 percent as the call, a first for CEO Evan Spiegel, chief strategy officer Imran Khan and CFO Drew Vollero, wrapped up Wednesday afternoon. During that time Spiegel fielded questions about Snap's product roadmap — "We love surprising our community, so it should be a fun rest of the year." — and content plans for Snapchat, which is already working with partners to create original series like Second Chance and The Voice on Snapchat — "We've got one show a day, that will grow throughout the end of the year."
The fast-talking Spiegel seemed to especially enjoy a question about Facebook copying Snapchat features. He laughed before answering, "If there's one thing that I'd want to communicate today, it's the overall importance of creativity to our business. ...The bottom line is, if you want to be a creative company, you've got to get comfortable with and enjoy the fact that people are going to copy your products if you make great stuff."
He continued that he's not surprised to see other companies following Snapchat with a camera-first strategy. But, he added, "just because Yahoo has a search box, it doesn't mean they're Google."
This story originally appeared on the THR.com.
