13 May, 2017
But Snap's revenue-per-user numbers declined from the fourth quarter in Wednesday's report while Snap struggled to add users outside of Europe and the USA and had difficulties monetizing users in Europe and the rest of the world.
Google went public in 2004, and reported its first earnings in October of that year, with sales of $503 million, while analysts were predicting $456 million. Snapchat had 166 million active daily users at the end of the quarter, up 36% from last year's first quarter, but well below the 400 million that Instagram has. Facebook introduced a feature very similar to Snapchat's "Stories" for its main network and the photo-sharing platform Instagram, which analysts anxious would eat away at Snapchat's already slowing growth rate.
Facebook also had a rough start after its first earnings report, but has since become a powerhouse. This number was arrived with a growth rate of 5 percent.
Snap now has 166 million users - a 36 percent increase from the same time a year ago.
Growth in Snapchat's user base began to slow down a year ago after Facebook's Instagram copied Snapchat's Stories feature, which lets users post short video clips that disappear after 24 hours.
Now, to be fair, one huge cost was in part because of the terms of Snap's IPO: Recode writes that Snap CEO Evan Spiegel was offered bonus stock as an incentive to take the company public.
"People are going to copy your product if you build great stuff", he said. "I think texting, one-on-one, they have their audience hooked".
Snap attributed the overall decline in revenue to seasonality, as the fourth-quarter typically sees more advertising than other quarters.
Unlike Twitter and Facebook, LinkedIn was also profitable, with net income of $4.5 million.
Snapchat launched in 2012 as a mobile app that allows users to send photos, known as snaps, that vanish within seconds.
In addition, Snapchat is also losing twice as much money as it was this time past year.
In Wednesday's conference call with analysts, Spiegel sought again to distance Snapchat from the likes of Facebook, pointing out that its main focus was not to get as many users to sign up as possible.
As we've often written before, the market tends to overreact to good news and bad news alike, so it's possible SNAP's share price dip won't last.
"The more that we can remove friction from this creative process, the more that people want to use this service, and that's our strategy", Spiegel said.
"Right now they clearly have a loyal user base in the younger population, but the over 30 year old demographic is one of the most attractive segments for advertisers due to their spending power", Eric Kim, managing partner at venture capital firm Goodwater Capital, wrote in a report.
"If they attempt to tackle both, Snapchat will discover that meeting the needs of a 15 year old vs. a 30 year old will be very different", Liu said in an email.
"They need to acquire the next Snapchat - companies that are doing one thing right", Britton said.
However, as Facebook continues its all-out assault on the company by copying the stories format pioneered by Snapchat, the comparisons will undoubtedly continue.
This could be an app such as Houseparty, a group video chat app that's popular with teens, or Musical.ly, a video social network that lets people create and share short music videos.
Of course, Facebook presumably won't be far behind in copying that, either.