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Snapchat drops daily users for first time after controversial redesign

Snapchat drops daily users for first time after controversial redesign

During the period from April 1 to June 30, Snap Inc received $262 million in revenue, with a net loss of $353 million.

Snap has been working to convince big advertisers to spend more of their budgets on Snapchat ads and reach the app's base of mainly 18-34-year-old users, and it beat analyst revenue forecasts as it drew in more worldwide and small business advertisers.

Snap reported 188 million daily active users during the last quarter - falling short of Wall Street's expected 192 million and dropping from last quarter's 191 million.

The social media company said its shift toward a self-serve model for advertisers was paying off and blamed a redesign of its app for denting user numbers.

Snap (SNAP) has lagged behind its social media brethren this year while waiting for its retooled design to resonate with consumers. After the report was released, Snap's stock price rose slightly to $13.20 from the regular session's close of $13.12. Last quarter, its stock dropped by as much as 24% after releasing its Q1 earnings report. On two occasions, they plunged more than 20% after results were announced. Snap recently appointed a new chief financial officer, Tim Stone, who was previously at Amazon.

Still, the social media company's valuation signals investors see potential for outsized growth, with Snap entering trading on Tuesday at almost 10 times expected revenue, compared to 7.6 times expected revenue for Facebook shares and 7 times for Twitter.

That's despite a drop in active users-a first for the company.

Evan Spiegel said Snap does consider users' feedback: "We feel that we have now addressed the biggest frustrations we've heard, and are eager to make more progress on the tremendous opportunity we now have to show more of the right content to the right people".

Snap did reveal that 11 of its Shows now have a monthly audience of over 10 million users, which is up from the 7 million in last quarter. It will be interesting to see if this trend of desiring privacy in the modern era will continue, or if Facebook and Twitter are just waiting to pounce. Chief Executive Evan Spiegel said in prepared remarks that the redesign was the primary reason for usage slipping, but he credited the changes for increasing viewership of key ad-supported content this year.

Employees had griped about Snap's network of small, spread out offices in Venice.

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