Snap shares fell more than 9% after hours when daily users and ad growth came in below what analysts expected, which matters to advertisers and investors.
Snap, the company behind Snapchat, saw its stock drop more than 9% in after-hours trading on November 4 after its third-quarter results. Revenue grew 14% from a year ago to $1.72 billion, which matched what analysts expected. User growth did not.
Daily active users are the people who open the app on a given day. It is a key number for Snap because advertisers pay to reach those people. Bloomberg reported that the company's ad revenue and user growth missed estimates, and that CEO Evan Spiegel acknowledged the shortfall.
Business owners who buy ads on Snapchat may want to watch this closely. Fewer users than expected can mean a smaller audience for an ad. Anyone who owns Snap stock has already seen the market react, though after-hours moves can change once regular trading opens.
The available material does not say why growth slowed, what Spiegel said in full, or what Snap plans to do about it. It also does not give details on how ad prices or ad results changed. Those details should come out as the company explains its results further.
Snap's revenue met expectations, but slower user growth spooked investors, so advertisers and shareholders should watch the coming quarters.
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