Snapchat, it seems, has still a long way to go before claiming supremacy besides the likes of Facebook, Twitter and Instagram. At least, that’s what its current earnings have to suggest. The social media platform’s performance – both in terms of revenue and growth of followers– has been plain dismal.
Snapchat’s Earnings in the Latest Quarter
Recently, Snap Inc. reported a massive loss in earnings and of course disappointing user growth. The photo-messaging app reported 166 million daily active users in the most recent quarter—only a paltry 36 percent increase from the previous year. Its earnings also failed to meet the expectations of Wall Street. The reports were revealed in the wake of rival Facebook’s announcement regarding its heartening revenue growth. It declared double-digit revenue growth for the first quarter. It has been pointed out that during its initial years, Facebook had also let down investors by registering low user growth. In 2012, it reported only a 32% user growth. However, it already had 552 million regular users at that point of time.
More bad news followed post the declaration of the aforementioned reports. The social media’s shares fell immediately – which of course – was engendered by investors fleeing in large numbers. Its shares plummeted by 21.5% to close at $18.05 on Thursday – not to forget that it’s the lowest since its share offering in March. Here’s a look at the number of users earned by the platform in different countries.
Its User Growth in Different Countries
The social media platform added just 3 million users in North America in Q1. This resulted in 71 million DAUs. The number remained steady in Q4.
In Europe it added a meager 3 million users in Q1 to reach 55 million DAU. The story is extremely disappointing as far as the rest of the world is concerned. In the Rest of the World it added just 1 million users registering 40 million DAU.
Snapchat or for that matter any other social media giant relies on its home market to steer its revenue growth. The dismal earnings from home have raised concerns regarding the immediate future of the social media platform as well. Though it would be a tad premature to predict the end of the platform, experts have started suggesting that it has limited scope. It has been opined that Snapchat’s future is largely based on its dominance of niche segments – only- and not the mass market. The company’s current performance has betrayed its valuation.
Facebook has been bent on introducing Snapchat-like features since its efforts to buy the same (i.e. Snapchat) fell flat on its face. This practice presents a formidable challenge for Snapchat since Facebook can easily outspend it. Its CEO Evan Spiegel, however, is in no mood to acknowledge such challenges. When recently asked about his fears of his company being “crushed” by Facebook he responded by saying that one has to get comfortable with the fact that they are going to be copied if they are making great stuff – obviously alluding to Facebook’s introduction of Snapchat-like features.