To stay alive in its brutish war against Facebook, one of the most important things for Snap to do is to grow the number of people who are using the app.
But it just isn’t happening fast enough.
Snap reported 173 million daily active users in its Q2 earnings report today, missing Wall Street’s expectations of 175 million. It also missed on revenue, reporting $181.7 million against an expected $185.8 million. That’s 77 million fewer daily users than Facebook-owned Instagram, which recently boasted 250 million for its Stories feature less than a year after launch.
Snap is investing in itself— ramping up advertising efforts as well as research and development. The company has spent nearly 10 times as much on sales and marketing as it had at this point in 2016, jumping from $39 million to $310 million. It also spent $255 million on research and development in the last quarter, compared to $36 million in the same period last year.
Snap’s stock has fallen more than 7% in after hours trading.