Snap Inc. said daily active users at its Snapchat social-media app lagged behind the company’s forecast in the second quarter, as audience growth notched in the early weeks of the coronavirus pandemic leveled off. Shares declined in late trading.
In a statement Tuesday, the Santa Monica, California-based company said daily active users grew 17% to 238 million, compared with the 239 million Snap estimated. Shares slid about 6% in extended trading after closing at $24.74, near a record high. The user shortfall overshadowed a quarterly revenue gain of 17%, which topped analysts’ estimates as advertisers turned to Snapchat to tout their products during the Covid-19 lockdown.
“At the onset of widespread shelter in place orders, as people sought to stay connected and entertained from home, we observed an increase in daily active users that informed our initial estimate,” Chief Financial Officer Derek Andersen said in prepared remarks to investors. “This initial lift dissipated faster than we anticipated as shelter in place conditions persisted.”
Snap is facing an increasingly unpredictable market — both for advertising and user growth — as the pandemic rages on. While sales in the current quarter have already risen 32% from a year earlier, the company said, the uncertainty of any economic recovery led Snap to skip giving a full revenue estimate for the period.
The company, whose app is especially popular with young people, drew $454.2 million in second-quarter sales, while analysts on average had projected $441.6 million. Snap’s net loss widened to $326 million, or 23 cents a share, from $255.2 million, or 19 cents, a year earlier. Excluding certain items, the loss was 9 cents a share, compared with the average 10-cent loss projected by analysts.
Snapchat shares fell as low as $21.30 in extended trading before recovering some of the late losses. The stock has jumped 52% this year and is trading close to levels not seen since the days following its 2017 initial public offering.
