It is the latest social media company to disappoint investors after Facebook and Twitter also saw a decline in users. Snap said new user retention for people over 35 has grown more than 8% since redesigning the app earlier this year. Snap stock was trading at just over $13 a share ahead of Tuesday afternoon's report, down from a 52-week high of $21.22. Snap previously didn't disclose any monthly user numbers, with executives arguing that daily actives better reflected the activity on the platform. In his prepared remarks, CEO Evan Spiegel said that the decline was primarily driven by disruption caused by the aforementioned redesign.
Snap has been redesigning its app to encourage users to interact with more of its ad-supported videos.More news: Two elderly men 'escape' nursing home to attend German heavy metal festival
Saudi Arabia's Prince Alwaleed bin Talal announced soon after the results that he had finalized a $250 million deal in May to buy a 2.3 percent stake.
Snapchat ad prices are down 90 percent in the past two years as it adopts automation, which typically drives down pricing. Much larger rival Facebook has replicated Snapchat features such as virtual animal ear filters for selfies and the "stories" format for sharing content.
The news was revealed in Snap's quarterly earnings, and the company may survive for a while longer - the company has been able to extract more money from their fading user population, earning $262 million in revenue, but still making a $353 million loss.More news: Boris Johnson told to apologise over 'totally out of order' burka comments
Investors, it seems, are unsure what to make of Snap's mixed results.
Snap also released guidance for Q3 2018 for the first time. Instead, Snapchat dropped its daily user total by 2% to 188 million users from an expected 193 million. Overall, the company posted a loss of $353m, or 27 cents a share, compared with a loss of 36 cents a share a year ago.
But the change has made it more hard for Snapchat to distinguish itself from other video-heavy apps and draw premium prices.More news: Ruby Rose cast as lesbian Batwoman for CW
Snap, which has never had a profitable quarter, went public in March 2017 with a $17 (roughly Rs. 1,200) share price.
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