Snap Inc. shares plummeted in after-hours trading Tuesday on news that the Venice company behind Snapchat badly missed revenue and user growth estimates in its first-quarter earnings report.
Shares fell more than 15 percent in late afternoon trading as the company failed to build on its surprisingly strong financial results the previous quarter.
The company posted revenue of $231 million in the first quarter, below Wall Street analysts' estimate of $244.5 million.
Daily active users registered at 191 million, below expectations of 194 million.
Average revenue per user came in at $1.21. Analysts had predicted $1.27.
The disappointing results are a blow to a company that has made dramatic changes to try and alter its fortunes.
Under pressure from Wall Street, Snap overhauled the look of Snapchat to make it more accessible to a wider audience. The change was met with widespread criticism from the app's most loyal fans, but the company succeeded in adding more users than expected in the fourth quarter.
In that period, Snap also introduced programmatic advertising _ an automated auction for marketers that significantly boosted the company's ad business.
But the company couldn't maintain that momentum in the first quarter.
"Snap delivered a massive miss across the board which will further ignite fears that this company has major challenges ahead with its app redesign and business model in limbo," said Daniel Ives, an analyst for GBH Insights.
