Snap Inc, the parent company of Snapchat, has reported better-than-expected financial results for the second quarter of 2018, although the company has lost daily active users quarter over quarter for the first time in its history.
The company posted revenue of $262.3 million for the quarter ended June 30, up 44 percent from the $182 million in Q2 2017, and a net loss of $353 million, an improvement on the $443 million net loss in Q2 2017.
However, the company ended the quarter with an average of 188 million daily active users, compared to 191 million at the end of Q1.
In Tuesday's earnings call, the company's chief executive officer and co-founder Evan Spiegel blamed the "disruption caused by our redesign" for the user decline, but said the company has been working to improve Snapchat based on user feedback.
"We feel that we have now addressed the biggest frustrations we've heard and are eager to make more progress on the tremendous opportunity we now have to show more of the right content to the right people," he said.
"We're working hard to expand the long tail of our content offering, and we are making steady progress on improving personalisation. Despite our DAU [daily active user] results this quarter, we believe that this is an important evolution of our product that will help drive future growth engagement."
Snap reported cash used in operating activities of $199 million for Q2, up from $210 million in Q2 2017; free cash flow of $234 million, up from $229 million year on year; and an adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) loss of $169 million, down from $194 million a year prior.
Net loss was $0.14 per share, compared to net losses of $0.16 per share in Q2 2017. Analysts had expected net loss of $0.17 per share and revenue of $247.2 million.
Snapchat's average revenue per user (ARPU) increased by 34 percent to $1.40 for the quarter, from $1.05 in Q2 2017. The company also announced that it now has 100 million monthly active users in the US and Canada.
During the quarter, Snap introduced Group Video Chat; launched Snap Kit for developers; released its Snappables, motion-controlled lenses for sharing augmented reality videos; and released an updated version of its Spectacles with HD video and faster transfers.
The company admitted it had to write down $40 million worth of unsold inventory of the original version of its Specatcles, after selling around 220,000 units.
Last month, the company confirmed the closure of its in-app mobile payments service Snapcash. It also made a recent round of layoffs that saw 120 engineers and potentially up to 100 employees in the advertising sector lose their jobs.
Three months ago, Snap reported first-quarter revenue of $230.66 million, up 54 percent from the year prior, and and a net loss of $385.78 million. This was pinned on a redesign announced in November that separated content from friends and content from publishers on the Snapchat app.
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