Snap stock declines over 25%
Despite rapidly growing revenue, Snap – owner of the Snapchat app – lost $2.2 billion USD in the first quarter of the year.
Most of those losses are due to one-time costs of their initial public offering (IPO), including a $750 million bonus for their CEO Evan Spiegel.
Despite the losses, there are Snap has positive numbers to focus on. The number of Snapchat users increased by 36%, while revenue per user is up 181%.
Revenue is also up 286% from the same time last year.
Tough competition from Facebook
While Snapchat continues to grow, they are facing more difficult competition from Facebook. Facebook owns Instagram, and Instagram has been bringing out more features to compete with what Snapchat offers. Facebook poses a big risk to Snapchat, since their nearly 1.3 billion users gives them a platform to continue growing Instagram – potentially impeding Snapchat’s future growth.