Social media company Snap’s third quarter report makes pretty grim reading. The company posted a net loss of $443.2m.
It also wrote down $39.9m as a result of losses from unsold Spectacles, the company's first venture into hardware. The company insisted the charges were a result of excess inventory and inventory purchase commitment cancellations.
Revenue was $207.9m versus an expected figure of $236.9m. Though average revenue per user was up 39% compared to the same quarter last year, it failed to hit Wall Street's estimates. Average revenue per user was $1.17 versus $1.30 expected.
Fewer users than expected
The company also only added 4.5 million new users, with CEO Evan Spiegel admitting it grew its daily active users (DAUs) "at a lower rate than we would have liked". DAUs were 178 million versus 181.8 million expected
Spiegel said the lower rate could be partially due to averaging the entire quarter, and July and August were more lacklustre than September.
The company is losing market share to rival Instagram, especially since the launch of feature Stories in 2016.
However, some ad technology platforms say there's been increased company interest in Snap especially because its user base is different from Instagram and it uses other types of ads, including better location-based targeting and augmented reality features.
Shares dropped 17.1% after-hours to $12.53, the lowest levels since early August, when the companuy reported disappointing Q2 numbers.