Snap Inc. continues to grapple the consequences of its decision to redesign its flagship service, Snapchat as it experiences more loss of users in the third quarter of this fiscal year at a rate that exceeds that of Wall Street's earlier predictions. Its market standing suffers the same fate with plummeting shares.
According to Reuters, the daily active user count of the social media app has dropped to a new low by 1 percent to 186 million from 188 million in the previous quarter.
During an investor's call, Snap Chief Financial Officer Tim Stone admitted that the decrease rate is expected to maintain or even get worse by the next quarter.
This would be the third sequential quarter that Snapchat faced major user declines.
Its market standing is also undergoing the same grim situation. As pointed out by the media outlet, Snap shares tumbled yet again by 10 percent in after-hours trade as it failed to convince Wall Street that next year would be better for the company.
As further indicated on Tech Crunch, Snap lost a $325 million for this quarter alone which is seen as quite a bit of an improvement when comparing to Q2's $353 million loss.
The Los Angeles, California-headquartered tech firm has reportedly lost a total of 52 percent in shares since the beginning of 2018.
At the call, Stone reiterated the company's goal to reach its full-year profitability target set for 2019. This was further made evident on the purportedly leaked internal memo released earlier this October from Snap's Chief Executive Evan Spiegel.
Stone clarified that the internal memo shouldn't serve as basis or guidance for any market predictions.
One of Spiegel's immediate plan to mitigate the firm's dire situation is to go after older users in the States and in Europe, a move that could expand Snapchat's core demographic from 13 to 34-year olds.
The company founder remained hopeful for Snapchat to gain more new users around the world where there are still billions of people who still haven't used or even encountered the app.
As Spiegel further maintained, the 2 million user decline can be attributed to its Android issue.
As pointed out by The Verge, Snap has yet to roll out a long overdue update on this platform.
Frustrations among its users regarding its decision to redesign the platform have also taken a toll on the company. According to reports, the new design caters more to Snap's money-making schemes and less on the interests of its users.
