A little more than a year after its highly anticipated IPO, Snap still struggles to live up to its hype. The company behind Snapchat reported disappointing results for the first quarter on Tuesday, with lackluster user growth being the most worrisome to Snap’s shareholders.
Snapchat’s user growth, both year-over-year and sequentially, dropped to all-time lows of 15.1 and 2.1 percent, respectively, indicating that the app may not be the “Facebook killer” it was often made out to be. And while tech investors often don’t worry too much about the (significant) financial losses posted by companies such as Snap, slow user growth is a red flag in Silicon Valley and on Wall Street.
To make things worse, Snap also failed to live up to Wall Street’s expectations financially, with both revenue ($230.7 million) and adjusted loss per share (-$0.17) coming in below analysts’ estimates.