Snapchat slips in Q1 to its slowest user growth rate ever, shares fall 16%

Snapchat stumbled in its Q1 2018 earnings report amidst a rocky redesign and sustained competition from Facebook, unable to keep up its comeback from last quarter. Snapchat reached 191 million daily active users, up from 187 million, with its growth rate sinking to 2.13 percent, it’s lowest ever, compared to 5.05 percent in Q4 and a disastrous 2.9 percent in Q3. It pulled in $230.7 million in revenue with and adjusted EPS loss of $0.17. That’s compared to Wall Street’s estimates of $244.5 million in revenue and an adjusted EPS loss of $0.16.

It seems that Snapchat’s sudden growth spurt last quarter was a fluke, it’s going to have trouble significantly increasing its user count. Wall Street hates that, and Snap’s share price fell about 16 percent in after-hours trading to under $12.

Snapchat spent the year’s first quarter trying to capitalize on Facebook’s Cambridge Analytica scandal while overhauling the design of its own app. Initial app store reviews were predominantly negative, but first-time installs and its App Store rank increased. Celebrity backlash and anecdotal declines in usage for some people have pushed Snap to waffle on the changes, in some cases changing the app to work more like the old version.

Snap just launched version 2 of its Spectacles camera sunglasses, but we’ll have to wait until next quarter to see any revenue from that. The question will be whether Snapchat’s layoffs of over 120 staffers will start to make a dent in its big losses.