Babar Khan Javed
Nov 8, 2017

Snap Q3 earnings report disappoints investors again

Achieving 87% of the target analysts were expecting, Snap Inc struggles to establish its credibility.

Snap Q3 earnings report disappoints investors again

Snap Inc's earnings report for Q3 2017 was released this week with a net loss of $443 million, resulting in the loss of 20% of the company's stock value.

Analysts are disappointed with the American technology and social-media company, which reported year-over-year revenue of $207.9 million, a 62% increase. This was 12% lower in nominal value than investor expectations of $236.9 million.

Whereas investors expected 8 million new users, Snap Inc managed to grow its daily active users from 153 million to 178 million year over year, while the third quarter brought in 4.5 million new users.

With four products, namely Snapchat, Spectacles, Bitmoji, and Zenly, investors anticipated ecosystem growth to translate toward profitability, particularly for the hotly debated Spectacles, the AR-based hardware product line.

With over 300,000 unsold Spectacles, the hardware portfolio represents a $40 million loss for Snap Inc. One of the reasons cited was poor demand planning and that many customers who purchased the hardware ended up returning them.

There was some good news among all the gloom: Earnings per customer (EPC) grew from $1.05 in Q2 to $1.17, a 12% rise.

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