Snap once again failed to impress
Snapchat has had a bad few months. But its dancing hotdog is doing great, with 1.5 billion views.
“Our dancing hotdog is most likely the worlds first augmented reality superstar,” said Snapchat CEO Evan Spiegel in the first five minutes of the company’s earnings call on Thursday.
That’s about the last of the good news.
Snap stock plummeted on Thursday after revealing that its past few months did not live up to expectations.
Snap Inc. missed analysts’ two big estimates: revenue and daily active users. Snap reported $181.7 million this quarter while analysts predicted revenue of $186 million, according to FactSet.
Snapchat, Snap’s core product, now boasts 173 million daily active users, less than what analysts had pegged it at 175 million.
Not so good. The stock dropped by more than 13 percent in after-hours trading, adding to its already brutal run since it begin publicly trading on the New York Stock Exchange in March.
Meanwhile, Facebook has continued its quest to crush Snap Inc. Instagram Stories now has more daily users than Snapchat overall. Facebook just released Watch, original shows not unlike what you see on Snapchat Discover.
It’s more of the same since Snap became a public company. It blew its first-ever earnings in May with shares dropping 25 percent after its numbers were released.
In somewhat good news, Snap is continuing to increase revenue per user, an important metric for all tech companies. Snap reported $1.05 per user, up from $0.50 the year prior and $0.90 in the last quarter.
“Our existing customers are spending more money with us. We still have a lot more room to grow,” said Chief Strategy Officer Imran Khan, referring to the company’s advertising clients.
More than 60 percent of ad impressions are now from Snap’s self-service and API platforms, meaning lower costs for the advertiser and for Snap. That’s very good news for growth going forward.
Spiegel also tried to assure investors of his faith in his company, saying he and his cofounder Bobby Murphy have agreed not to sell any of their shares until the end of the year.
It’s been a tough run for Snap. The company is running against Facebook’s Mark Zuckerberg and his army of engineers. Facebook began its slaughter with the release of Instagram Stories, a similar experience to one of Snapchat’s core feature, in August last year. That’s pushed once loyal Snapchat users to use Snapchat less and Instagram more, like Mashable‘s own Damon Beres and professional creators, as Mashable first reported with data from social analytics company Delmondo.
Facebook hasn’t stopped there. It’s since pushed more similar experiences like selfie masks and other augmented reality lens. At Facebook’s annual conference in April, Zuckerberg essentially invited developers to help him compete against Snapchat.
Snap CEO Evan Spiegel has pressed on, with reports saying he has told his team to “focus”and not worry about Facebook.
“Regarding product pipeline, very excited about that. Its what we love to do over here. Were having a great time,” Spiegel said on Thursday’s call with analysts.
Still, Facebook remains a big issue for Snapchat since they are both advertising businesses pulling from the same pool of digital advertising dollars.
Snapchat has tried to convince advertisers and analysts of its worth by pitching its unique audience. Snapchat users are more loyal, Spiegel has argued, because the app doesn’t do much growth hackingunlike other internet platforms and apps.
One analyst on the call noted it seemed that Snapchat has done growth hacking since he had received mobile notifications.
“We’ve been sending notifications like that since 2014 so not sure since you’re just seeing that now,” Spiegel said.
The analyst then asked what Spiegel meant by growth hacking, if he wasn’t referring to push notifications.
“There are plenty examples online if you want to go for a Google,” Spiegel said.
That didn’t impress.
“I didnt even understand his response,” someone said on the call, most likely referencing Spiegel and probably thinking he was on mute.
But there’s some hope for Snap in the future: hardware. Snap released Spectacles, its video-camera sunglasses, in November and reported selling $8 million worth in the first three months of 2017. Snap reported making $5.4 million from Spectacles in the second quarter.
That’s small in comparison to its overall revenue of $181.7 million this quarter. But Snap is also focused on mergers and acquisitions, Chief Financial Officer Drew Vollero said on the call, and that includes hardware companies.
Mashable reported Snap recently acquired a company that sells a selfie-taking drone, which would provide another revenue stream.
For now, there’s dancing hot dogs.