Shares of Snapchat operator Snap (NYSE: SNAP) have plunged today, down by 16% as of 10:40 a.m. EST, after the company reported third-quarter earnings that fell short of expectations.
Revenue in the third quarter rose to $207.9 million, while the company's net loss more than tripled to $443.2 million, or $0.36 per share. Daily active users (DAUs) crept higher to 178 million. Average revenue per user jumped 39% to $1.17, while hosting costs per DAU came in at $0.68.
That did help gross margin slightly, but total costs and expenses rose nearly 160% to $670 million. The company also took a $39.9 million charge related to Spectacles inventory and purchase commitment cancellations.
Snap also announced that it was currently in the process of overhauling its core Snapchat app in order to address long-standing criticisms that it is hard to use. That's a pretty risky move, and CEO Evan Spiegel said that Snap expects the changes to be "disruptive to our business in the short term." The company also said it is developing an algorithmic solution for content discovery, similar to its social media peers, while it continues to make progress with improving its Android app, which has long suffered from performance issues.
Unfortunately, Snap does not provide investors with any type of forward-looking guidance, so aside from third-party analyst estimates shareholders are left in the dark as far as what to expect for the fourth quarter. Shares rebounded slightly after Chinese tech giant Tencent disclosed that it had accumulated a 12% stake in the company.
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