Despite Strong Earnings Report, Snapchat Loses 3 Million Users

Snapchat has said that its daily user base declined by 2 percent. Image used for representational purposes only. 

(Photo: iStock Photo)

Snapchat's daily user base has declined in its latest quarter for the first time. Still, its parent, Snap Inc., reported a smaller loss than Wall Street had been expecting.

Snap, known for its disappearing photo and video messaging app Snapchat, said on Tuesday that its daily user base has declined by 2 percent to 188 million from 191 million in the first quarter; resulting in a decline of 3 million active users.

This is the first time the company has seen its user base decline, based on reported numbers.

The Venice, California-based company also said it had a loss of 27 cents per share in the quarter that ended on 30 June. Losses, adjusted for stock option expense and amortisation costs, came to 14 cents per share, topping Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for a loss of 17 cents per share.

The company posted revenue of $262.3 million in the period, also topping Street forecasts. Ten analysts surveyed by Zacks expected $247.2 million.

For the current quarter ending in October, Snap Inc said it expects revenue in the range of $265 million to $290 million.

After initially rising sharply, Snap's stock traded lower in after-hours trading and was down by about 1 percent at $13.01.