Snap Inc. managed to beat Wall Street’s expectations for revenue and earnings despite its user count continuing to drop. Snap lost $325 million this quarter compared to $353 million in the last quarter. The company reported a loss of 12 cents per share, lower than analysts’ expectations of a loss of 14 cents per share.
Snap earned $298 million in revenue for the third quarter, beating Wall Street’s expectations of $283 million in revenue. The result marks a 43 percent year-over-year increase, and revenue for the last 12 months surpassed $1 billion.
Snapchat continued to shrink in the third quarter. Daily active user count for the app dropped by 1 percent to 186 million. User count is still up 5 percent year-over-year. According to CEO Evan Spiegel, many of the lost users were on Android, where Snapchat doesn’t run as well as on iOS.
The company has also been facing considerable competition lately. WhatsApp’s Snapchat Stories clone Status has 450 million daily users while Instagram Stories has 400 million.
Snap is now depending on the Project Mushroom engineering overhaul of its Android app to accelerate user growth and retention. Snap has also been expanding its third-party advertising offerings and increasing its focus on content partnerships.
Snap posted average revenue per user of $1.60 compared with consensus estimates of $1.52. Average revenue per user dropped 12.5 percent in the developing world, but was up 14 percent globally due to strong gains in the US and Europe markets
Snap projects $355 million to $380 million in revenue for the fourth quarter. That is right around consensus estimates of $370 million.
The stiff competition and user shrinkage has pushed Snap’s shares to new lows. Snap’s share price is hovering around $6.70, close to its $6.46 all-time low. Its share price today is a far cry from its $24 IPO opening price.