Snap Continues to Struggle to Gain Users

Snap Continues to Struggle to Gain Users

SAN FRANCISCO — Snap, the maker of the disappearing-message app Snapchat, is continuing to struggle.

The social media company said on Thursday that it lost two million daily active users over the past three months after shedding three million over the summer, knocking its total down to 186 million. While that number was up from a year earlier, the consecutive quarterly losses were troubling for a company that has not been dealing with the problems of disinformation and bias that have put other social media firms under scrutiny.

Snap also continued to lose money. While the company said its revenue rose 43 percent to a record $298 million in the third quarter from a year earlier, its net loss totaled $325 million. The loss was narrower than a year ago.

The company’s stock, which has lost almost half its value since the beginning of the year, fell 11 percent in after-hours trading after closing at $6.99 at the end of regular trading.

Snap has faced difficulties retaining its users recently, in part because of an unpopular redesign that effectively separated social and media into two parts of its app last year. Snap rolled back some of the redesign after people revolted, but it has been slow to win users back and gain new ones.

The company said people continued to drift away from Snapchat’s Android app in particular because it did not offer the same speed and performance as the iPhone app. Snap has been working to change its Android app for some time, but did not announce a date for the redesign.

Evan Spiegel, Snap’s chief executive, said the company was focused on quality rather than speed as it prepares the Android project, code-named Mushroom.

“We are making good progress testing the application in select markets,” Mr. Spiegel said. “We look forward to rolling it out when it’s ready.”

The company expects to continue losing daily active users in the current quarter, said Tim Stone, Snap’s chief financial officer. He declined to say how many people it expects to leave the app.

Snap has been taking steps to add to its management. On Wednesday, the company said it had hired two executives to replace Imran Khan, its chief strategy officer, who said in September that he would leave the company. His role will be split between Jeremi Gorman, a former advertising executive at Amazon, who will oversee Snap’s business, and Jared Grusd, a former chief executive of HuffPost, who will lead strategy.

“What they need to fix is their product,” said Richard Greenfield, an analyst at BTIG Research.

(Original source)