Snapchat has to either find ways to increase its ad revenue or increase its daily active users before it turns out to be a battle of survival.
Snapchat’s falling growth rate has been an area of concern for some time now though the figures are back to haunt the company during its recent quarterly earnings call, the first since it went public.
Snap revealed its DAU or daily active user count stands at 71 million in North America, a region that has proved to be its biggest ad revenue source so far. Unfortunately, that figure is just 3 million more than the 68 million DAU it reported during its last quarter results.
The firm’s growth rate elsewhere in the world also revealed a similar story. In Europe, the company DAU count stands at 55 million, which too has shown an increase of just 3 million. Elsewhere in the Snap’s DAU is another 40 million, which shows an increase of only 1 million.
Snap’s year-over-year growth too remains on the decline, being at 36 percent compared to the 48 percent it was in Q4. On the whole, Snap has a daily active user base of 166 million, compared to the 158 million it had in Q4.
No wonder those figures are as much worrying to the Snap officials as it is for its investors. Shares recorded a dip of 24 percent as investors become increasingly skeptical about the long-term growth potential of the company. There seems considerable doubt if Snap can manage to bump its ad earnings with a stagnating user base.
Its share price of $18.19 also happens to be the lowest that it has ever been since it went public. Snapchat though chose to draw consolation from another figure it chose to highlight, that of more than 3 billion snaps created. In short, it chose to show that its users continue to be deeply involved with their services.
Investors have also voiced concern amid competitor’s tendency to copy some of Snap’s flagship features, including its Stories concept. Snapchat though believes it can still stay a step or two ahead in the innovation curve and launched a slew of new features.
Those include a new Stories Search feature wherein you can search for public posts on the basis of topic. Similarly, there are the new Scissors cut-and-paste and Magic Eraser that allows for easy photoshopping and editing options.
However, it remains to be seen if Snap can still chart out a growth strategy in the long run.