Snap added just four million users in the first quarter of the year - the lowest number it has ever posted.
Revenues for the period reached $230.6m, which was below expectations. The company’s share price plummeted 17 per cent on the back of the news.
All of which is of course being pinned on Snapchat’s still controversial redesign, which was rolled out in January and has attracted no end of criticism from both users and the media.
“This new design is driven by our fundamental belief that separating friends from professional content creators is important to both our mission and the long-term growth of our business,” CEO Evan Spiegel said in an investor call last night, as transcribed by Seeking Alpha.
“We are already starting the see early signs of stabilisation among our iOS users as people get used to the changes, but still have a lot of work to do to optimise the new design, especially for our Android users. Our time spent remained more than 30 minutes per day on average following the redesign, and we have also started to realise some of the positive benefits, including increased new user retention for older users.
“We are now focused on optimizing the redesign based on our ongoing experimentation and learning," Spiegel continued. "We are currently rolling out an update to address this by sorting communication by recency and moving Stories from friends to the right side of the application, while maintaining the structural changes we have made around separating friends from creators and sorting friends’ Stories by relationships.
“The redesign created a lot of new opportunities, and we look forward to continuing our efforts to refine and improve Snapchat.”
The company faced plenty of grilling on the subject on the call, with CSO Imran Khan having to field questions about advertiser uncertainty.
“At the end of the day, advertisers are rational. They want to advertise and they want to drive return on their ad spend. But at the same time, they're human,” Khan said. “When there's a lot of negative news on the press every day, it does give people pause, it does influence people buying decisions, know it's very hard to handicap how what percentage, but that does come out on the conversation and become a disruption on the selling process.”