October 25, 2018 / 8:10 PM / 24 days ago

Snap adds fewer users than expected as redesign pain lingers

Oct 25 (Reuters) - Snap Inc had fewer active users at the end of September than Wall Street was expecting, as an unpopular redesign of the photo-messaging app hit results for a second quarter running, amid fierce competition from Facebook’s Instagram.

Snapchat’s owner said on Thursday the number of daily active users on the app fell to 186 million in the quarter ended Sept. 30, from 188 million three months earlier.

The figure, widely watched by investors and advertisers, also missed analysts’ average estimate of 187.56 million, according to Refinitiv data.

Still, Snap’s overall revenue jumped about 43 percent to $297.7 million, topping Wall Street expectations of $283.2 million.

Snapchat’s redesign, aimed at creating a more personalized service for users, has struggled to attract more users since its roll-out last year and newer versions of the app have been criticized for being too confusing to use.

Meanwhile, Facebook has been winning more users by introducing Snapchat-like features on photo-sharing service Instagram and its other apps.

The number of advertisers active on Snapchat remains small compared with that on Facebook and Instagram, though the figure is steadily growing, analysts at Stifel said on Wednesday, citing data from Merkle.

Snap said average revenue per user increased to $1.60 in the third quarter, from $1.17 a year earlier. The figure was up 14 percent from the previous quarter.

Net loss narrowed to $325.1 million or 25 cents per share, from $443.2 million or 36 cents per share a year earlier.

Snap also said it expects fourth-quarter revenue of between $355 million and $380 million. Analysts were expecting revenue of $371 million. (Reporting by Vibhuti Sharma in Bengaluru and Sheila Dang in New York Editing by Sai Sachin Ravikumar)

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