Snapchat isn’t having a good time right now. The company just released its third quarter results, and once again suffered a decline in daily active users.
That number fell by 2 million to 186 million people, marking the third straight quarter of user declines. However, Snap seems confident it can break the losing streak in 2019.
A detailed trajectory about exactly how this will be achieved wasn’t shared during the company’s earnings call. But Snap co-founder and CEO Evan Spiegel and CFO Tim Stone said that changes will be coming — including a redesign of the app, internally codenamed “Mushroom.”
Spiegel pinned the blame for daily active user decline on a “communications and marketing challenge.” He wants to try and reverse this by appealing to users older than the typical Snap user. He also hopes to grow the user base overseas. In addition, Spiegel wants to try and get “back to basics” with focus on Snapchat being a one-on-one communication tool.
A downward slide
Investors don’t seem entirely convinced, however. Shares fell 10 percent in after-hours trading. Having gone public in March 2017 at $24.48 a share, Snap is now trading at $6.09.
It seems that the company is still being hurt by the lingering effects of the disastrous user redesign back in 2017. This redesign caused a massive backlash among users. At one point, Snap’s value fell by $1.3 billion after reality TV star Kylie Jenner tweeted about her disapproval of the change, writing “Sooo does anyone else not open Snapchat anymore?”
Snap eventually reversed some of the changes — but the damage appears to have been done. Maybe Snapchat’s new dive into scripted content might help bring some daily users back.
Are you a regular Snapchat user? What do you think is causing the decline in users? Let us know your thoughts in the comments below.