Snap Inc. shares fell the most in about two months after the company reported its first-ever drop in daily active users. But revenue gains in the second quarter proved that the company is making headway in the mobile-advertising market dominated by Facebook Inc. and Google.
The declining user numbers at Snapchat, attributed to an unpopular app redesign, worried analysts who were looking for rapid growth, since the app is still much smaller than Facebook and Instagram.
Still, Snap exceeded expectations for quarterly sales and won the endorsement of a key investor with a $250 million share purchase by Saudi
billionaire Prince Alwaleed Bin Talal.
After a tumultuous first year as a public company, Snap for the first time offered a revenue forecast, indicating that it has a clearer understanding of its business potential, even after shifting strategies, cutting staff and cycling through managers. Snap appointed a new chief financial officer Tim Stone from Amazon.