Snapchat’s foundation company Snap, announced the financial data for the first quarter of 2017. Th revenue report of the company revealed the damage. Snap, the social media application and the “camera company” behind Snapchat have an encrypted working system. We have a clearer picture of the company’s financial performance, when Snap’s quarterly earnings report was announced for the first time. The Securities and Exchange Commission documents over the past two years have given some idea of the company’s performance, but recent financial data showed the facts.
The biggest question about the company was whether it would sink against the social media giants like Facebook. Snapchat’s ability to attract young people helped it to advance before the firm’s initial public offering (IPO). But, the company faces a serious competition with Facebook and Instagram, who are not hesitate to copy Snap.
The recent financial data of Snap showed that this copying tactic has created a certain impact on the company. Snap states that it has nearly 166 million active users a day which was 122 million a year ago and 150 million before the IPO. According to this statement there was a clear increase in the number of users of Snap within a year. However, Instagram‘s statement in April 2017 claims that the company had over 200 million users on Stories.
Snap announced a loss of $ 2.2 billion and $ 2.31 per share in its statement. In the previous year, the loss of the firm was 14 cents or $ 104.6 million per share. The greatest impact of this huge loss is said to be $ 2 billion from stock-based payments.
Despite the declared lose of the company, the revenue of the firm is almost four times higher than the previous year reaching 149.6 million dollars. The company says revenue per user is up to 90 cents in average while it was 32 cents a year earlier.
According to statements of Snap in IPO documents, the company has not succeeded to have profit since the start of commercial operations in 2011. And there is a total loss of $ 1.2 billion. Most of Snap’s income comes from advertisements. The company said that it could never reach profit or continue profit in its explanation to its investors.