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Snap posts $2.2bn loss in first results


San Francisco — Snapchat parent Snap Inc saw its shares slide Wednesday after posting a loss of $2.2bn in its first quarterly results since its share offering earlier this year.
The loss for the California firm known for its disappearing messages reflects about $2bn in stock compensation awarded at the time of the company’s initial public offering.
Snap disappointed analysts with reported revenue of $149.6m in the three months ending in March.
That was a jump of 286% from a year ago but below Wall Street estimates of around $158 million, and a significant miss for the fast-moving social media segment.
Shares in Snap plunged nearly 20% in after-hours trade to $18.46 following the results.
Snap said the number of daily active users grew to 166-million at the end of the quarter, a 36% increase from a year ago but just 5% higher than at the end of 2016.
Analysts have offered mixed views about Snap’s future, debating whether it can mimic the success of Facebook or end up in the tech junkyard.
Although Snapchat is best known for its smartphone messaging, it has also developed partnerships with numerous media outlets eager to reach its audience with news, video and other content.
The company contends it can generate healthy and sustainable revenue with advertising aimed at its users, the bulk of whom are in a coveted demographic of people 18 to 34 years old.
Snap conceded in IPO paperwork that there is no guarantee it will attract older audiences.
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