Snap Inc (NYSE: SNAP) lost over a fifth of
its value following a third-quarter earnings miss.
The social media company delivered third-quarter adjusted EPS of $(0.14), missing estimates by a penny. Sales of $207.9 million
came in far below estimates of $239.4 million.
Q3 Highlights
- Daily active users managed to grow 17 percent year-over-year to 178 million
- 4.5 million users added quarter-over-quarter
- Average revenue per user came in at $1.17, an increase of 39 percent year-over-year
- Capital expenditures rose 33 percent quarter-over-quarter
It appears the camera company’s consumer product, Spectacles, failed to live up to the hype. Snap recorded $39.9 million worth
of excesss inventory related to the Spectacles.
“Primarily related to excess inventory reserves and inventory purchase commitment cancellation charges,” Snap said in its earnings
release.
Instagram Impact
While more users are signing up for Snapchat over Instagram, that probably won't last for long, according to a report from
marketing analytics company,
Jumpshot.
Snapchat continues to trend down while Instagram is increasing its user base at a faster rate, largely due to new features that
it copied from Snap. Instagram is also growing at a much faster rate internationally, as Snap has mostly ignored targeting
under-developed nations.
The stock traded around $12.70, down 16 percent in the after-hours session.
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.