More than six months later, Snap is now blaming the same design for a decline in its daily active users. In his prepared remarks, CEO Evan Spiegel said that the decline was primarily driven by disruption caused by the aforementioned redesign. CNN reports that this is the first time Snapchat's user count has dropped since Snap Inc went public.
He said the company believes it has addressed users' biggest frustrations.
Saudi investor Prince Al-Waleed bin Talal, whose investing firm owns stakes in Twitter and the Four Seasons hotel chain, said in a tweet that he'd purchased about $250 million worth of the company's shares. Much larger rival Facebook has replicated Snapchat features such as virtual animal ear filters for selfies and the "stories" format for sharing content.
Earnings from Facebook and Twitter Inc in recent weeks spooked social media investors by showing issues around data privacy, abusive content and phony accounts were weighing on user growth.
Snap said ending leases in Venice, California, to consolidate offices a few miles north in Santa Monica cost it $3.9 million in the second quarter and would result in total expenses of $25 million to $45 million in 2018, mostly in the current quarter. This translates to a net loss of $0.14 per share, compared to net losses of $0.16 per share in Q2 of 2017.
Advertising revenue is up 48 percent year-over-year as well, making the platform all the more enticing to the potential advertiser. After initially shooting up more than 10 percent following the unexpected revenue beat, it then dipped to below its closing price before ticking back up slightly.
Snapchat's massively unpopular redesign continues to hurt the company.
But the change has made it more hard for Snapchat to distinguish itself from other video-heavy apps and draw premium prices.