Snap didn’t deliver and now its stock is paying the price

Image: Reuters/Dado Ruvic
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Snap is in trouble again, after today (May 1) reporting weak revenue and user growth for its first quarter, and blaming the shortcomings on a much-criticized Snapchat redesign.

“One of the great things about our software products is we can update them at any time,” CEO Evan Spiegel told investors on an earnings call.

Wall Street was unimpressed, and Snap’s stock price plummeted in after-hours trading.

Analysts had been expecting Snap to post revenue of about $244 million, but it generated just $230.7 million for the quarter. That’s up 53% from the same period last year.

Snap also failed to add an expected 194 million users to Snapchat, instead snagging only about 4 million in the first quarter. That’s a slowdown in the promising growth Snapchat had shown last quarter, and puts total users of the app at roughly 191 million.

Snap held its earnings call on the same day that its arch-rival Facebook had its annual developers conference, where the latter unveiled yet more augmented-reality features that seem squarely aimed at Snapchat’s users.