3 million daily active users were lost by Snap during the second quarter of this year. The daily active users are considered as an indicator of growth. However, despite the drop in the number of users, the results of the company defied the expectations of analysts with an increase in revenue amounting to 44 percent to $262 million.
The shares of Snap were volatile during after-hours trading, at one point, it increased by more than 10 percent before plunging to more modest levels.
Snap defied the expectations of analysts of $251.2 million in revenue to report a revenue of $262 million for the second quarter. The figure is up from the $182 million that was reported in the same quarter during the previous year.
The net loss declined by 20 percent to $353 million in the second quarter. This time during the previous year, Snap made a net loss of $443 million.
The average revenue per user increased to $1.40 from $1.05 a year ago.
Snap seems to have come in from the cold with these results.
The chief executive of Mindshare’s Worldwide Central, Nilufar Fowler, said that the redesign of Snapchat that was announced last January has “clearly started to have some positive impact” for the advertising-dependent platform.
She added: “Separating ‘friends’ and ‘brand’ content in the redesign always risked upsetting advertisers, this performance, at least for now, shows that advertisers still see value.”
She, however, cautioned that “Whilst revenues may be up, the drop in Snapchat DAUs will be worrying if it is more than just a blip, especially if the drop is due to competition from Instagram.”
Evan Spiegel, the Chief executive of Snap, stated: “We are excited by the progress we have been making and are optimistic about the opportunities ahead as we continue to invest in innovation.”