Snap shares plunged more than 20% in afterhours trading yesterday after the company reporting slowing user growth on Snapchat and disappointing revenue as competition in the market heats up.
Daily active users on Snapchat rose 36%, reaching 166 million, down from the 60%-plus growth it was experiencing before Snap went public. While growth rates remain ahead of Messenger and Instagram, those platforms already have significantly more users.
Revenue quadrupled to $150 million, but considering Snap’s valuation of over $20 billion, investors were not impressed—especially since the company ultimately lost $2 billion due to stock-based compensation related to the IPO.
Snap, originally called Snapchat, was founded in 2012 and went public last year. The company also sells Spectacles, which are glasses equipped with a small camera to record Snapchat content.