Snap Stock Is Tanking After Snapchat Redesign Fails

Snapchat Spectacles 2.0

Snapchat Spectacles 2.0

Snap Inc. on Tuesday said revenue rose 54% in the first quarter from a year ago, but that missed analyst estimates and fell almost 20% short of the previous quarter as efforts to wrest a larger share of advertisers' budgets were impeded by Facebook Inc. and Alphabet Inc.'s Google. And things won't exactly look up in Q2: Snap noted that year-over-year revenue growth rate would "decelerate substantially" next quarter.

Snapchat has also faced intense pressure from Facebook, which has updated its range of social apps, Messenger, Instagram and WhatsApp, with features to similar to those on Snapchat, including Stories and camera filters.

A redesign of the company's.

Shares are down about 16% in Tuesday's after hours session at $11.90 in a 52-week range of $11.28 to $23.57.

Revenue came in at $230.7m (£170m) for the three months, a big miss on analyst expectations of $243.55m, and down 19pc on the prior quarter, which it blamed on "seasonality".

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The company has been struggling to recover from its controversial Snapchat redesign, which has pushed away some of its core users.

The social media service said its number of daily active users had risen to 191 million, up from 187 million in the last quarter, but the increase was smaller than predicted.

The app's redesign has prompted criticism from influencer Kylie Jenner and other celebrities.

"We are already seeing signs of stabilization among users, but still have work to optimize design among Android users", Spiegel told reporters and investors.

Average revenue per user also took a hit, up 31% year-over-year to $1.21, but down 21% since last quarter.

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