Snapchat Loses 3 Million Daily Users, But Posts Q2 Earnings Beat

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That's despite a drop in active users-a first for the company.

The most interesting aspect of the report is Snapchat's daily user count, which dropped from 191 million in Q1 to 188 million in Q2.

Snap disclosed Tuesday that the app lost 3 million of its daily active users due in large part to its controversial redesign.

Shares in Snap climbed more than 12 percent in after-hours trading before reversing course and going flat.

More than six months later, Snap is now blaming the same design for a decline in its daily active users. Snap CEO Evan Spiegel blamed the decline on "the disruption caused by our redesign" in prepared remarks for Tuesday's earnings call.

Snap also has been redesigning its app to encourage users to interact with more of its ad-supported videos. This is a big one, considering all users see these but not all users necessarily purchase the premium filters that give you horns or make you a Scottish Fold.

Saudi Arabia's Prince Alwaleed bin Talal, a well-known tech investor, announced on Tuesday that he had invested $250 million into the company, in return for a 2.3% stake.

Snapchat ad prices are down 90 percent in the past two years as it adopts automation, which typically drives down pricing. Instagram has continued to copy Snapchat features, such as it did with Stories.

A Snapchat redesign in February aimed at encouraging users to watch more videos prompted user protests after they found it more hard to find the content they wanted.

On the upside, the company reported second quarter revenues of $262.3m against analyst estimates of $249.8m, up 44% over the same period past year, and a loss of $0.14 earnings per share against a loss estimate of $0.18.

Snap lost about 1 million users in each of its three geographic reporting regions: North America, Europe and rest of world. Both companies shed some 19 percent in market value after reporting, and the results also weighed on Snap shares. Overall, the company posted a loss of $353m, or 27 cents a share, compared with a loss of 36 cents a share a year ago.

Snapchat's massively unpopular redesign continues to hurt the company.

Snap, which has never had a profitable quarter, went public in March 2017 with a $17 (roughly Rs. 1,200) share price.