Snapchat’s Controversial Redesign Blamed for Loss Millions of Active Users

Snapchat parent Snap is expected to report second-quarter earnings on Tuesday

Snapchat parent Snap is expected to report second-quarter earnings on Tuesday

"One of the most important things about the redesign is that we're surfacing the right content to the right people as quickly as possible", said Spiegel, noting the revamp has lead to an increase in users 35 and older sticking around longer, which has always been a hope for the company.

The disappointing user numbers came as Snapchat faces mounting competition from Instagram.

Saudi Arabia's Prince Alwaleed bin Talal has bought a 2.3% stake in Snap - the company behind Snapchat - for $250m (£193m).

Shares in Snap climbed more than 12 percent in after-hours trading before reversing course and going flat. That's near the low end of the company's range over the past year.

The earnings report didn't have any specific sales figures for its latest Spectacles hardware, though it did report $2 million in non-advertising revenue.

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Despite the fall in the number of users, the firm said revenues were up and its losses had declined in its second quarter.

Snap has been redesigning its app to encourage users to interact with more of its ad-supported videos. Despite the decline in active monthly users, Snapchat saw its revenues jump to $262.3 million, up by 44 percent from the same quarter past year. The company for the first time offered a forecast for future revenue, indicating that it has a clearer understanding of its business potential, even after shifting strategies, cutting staff and cycling through managers. That 188 million daily active user number is 8 percent higher than this time a year ago, and CFO Tim Stone said that monthly active users are now up to 100 million in United States and Canada. The three months ending in June was the first full quarter in which all users shifted to a new version of Snapchat that separates content from a user's friends and from public figures.

Earnings from Facebook and Twitter in recent weeks spooked social media investors by showing issues around data privacy, abusive content and phoney accounts were weighing on user growth and sending expenses higher. Both companies shed some 19 percent in market value after reporting. "We saw and continue to see Snap as a niche platform".

Snapchat later made some changes, but in the months following, over 1.2 million users around the globe signed a petition, asking the company to revert back told the old design.

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