Snap’s stock price plummets after weak earnings

From The Verge: Snap published its third quarter earnings report as a public company this afternoon. This first two did not go well, and the third was no better. The company missed investors’ expectations in terms of revenue and user growth, and the share price plunged over 15 percent in after-hours trading.

The company brought in $207 million in revenue for the third quarter, up 62 percent over the same period last year. But its losses expanded much faster: Snap lost $443 million in the third quarter, nearly quadruple the amount of cash it burned through during the same period in 2016. Around $40 million of that was a write-down for unsold Spectacles.

Snap said it now has 178 million daily active users, up 17 percent year over year, and it has 4.5 million more daily active users than it did last quarter.

Snap has been making progress in its efforts to automate its ad business. But the short term impact on revenue has been rough. “Our efforts at automation have gained traction very quickly this year, with 80 percent of Snap Ad impressions delivered programmatically in Q3, up from zero percent one year ago,” said Spiegal in his prepared remarks for today’s investor call. “The speed of this transition surpassed our expectations, but has dramatically reduced pricing as advertisers move from direct sales to our unreserved auction. This has decreased CPMs more than 60 percent year-over-year, which has made it harder to grow revenues at the rate we would have liked.”

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