Snap Inc., the parent of popular disappearing-messaging app Snapchat, reported quarterly revenue that missed analysts' estimates and slowing user growth in its first results after its red-hot IPO, amid stiff competition from Facebook Inc.
Shares of the company plunged more than 20 percent to $18.30 in after-hours trading on Wednesday.
Snap said its daily active users (DAUs) rose 36.1 percent to 166 million in the first quarter ended March 31. The company reported a 47.7 percent rise in users for the fourth quarter and a 62.8 percent jump in the third quarter, according to its IPO filing. J.P. Morgan expected Snap's first-quarter DAUs to grow to 169 million, while Monness, Crespi, Hardt & Co Inc pegged it at 173 million.
Facebook, which once made a $3 billion bid for Snapchat, has upped the ante by making the camera a central piece of its apps and offering features similar to Snap on its platforms, including Instagram and WhatsApp. The company recently said Instagram Stories alone had reached 200 million daily active users.
Snap said average revenue per user rose 181.3 percent to 90 cents in the first quarter while revenue jumped nearly four-fold to $149.6 million. However, analysts on average had expected revenue of $158 million, according to Thomson Reuters.
The company's net loss widened to $2.21 billion, or $2.31 per share, in the first quarter, from $104.6 million, or 14 cents per share, due to stock-based compensation around the IPO.
Snapchat launched in 2012 as a mobile app that allows users to send photos that vanish within seconds.
The company rebranded as Snap Inc last year, and its $3.4 billion public listing in March was the hottest technology offering in three years.