Snapchat reports first earnings since going public ; Lost $2.2 billion last quarter !

Just last week, Facebook posted revenue growth in the double digits for its first quarter, which it has done consistently since 2012 when it had its initial public offering.

Short version: For a long time, tech companies tried to argue that investors shouldn’t worry about the stock they paid their employees, because it didn’t represent the “real” cost of running their business. Snapchat had 166 million active daily users at the end of the quarter, up 36% from last year’s first quarter, but well below the 400 million that Instagram has.

Since the Snap IPO, Facebook has been very aggressive about copying Snapchat.

Snap reported that its net loss increased significantly from $104.5 million to $2.2 billion as the company spent $2 billion on stock-based compensation expense after its IPO. Moreover, co-founders of Snapchat Evan Spiegel and Bobby Murphy each lost more than $1 billion due to share dip. Only fourteen per cent of revenue came from outside North America.

However, analysts had expected faster growth both in user numbers and in revenue per user. Indeed, the Stories feature on Instagram, which is owned by Facebook, has some 200 million daily users.

Originally launched by Snapchat, the “Stories” feature shows photos and videos shared in chronological order that disappear after 24 hours. See a trend here? “That’s going to continue”.

Snap chief executive Evan Spiegel (26) says he’s not anxious about Facebook. It’s essentially not a social networking application like Facebook or WhatsApp.

The social network argued during its earnings call that numerous teenage users it has can’t be reached by traditional television or print advertising, according to the Verge. This is three times what it was at the same time past year but with a sharp decline from the previous quarter. This concept was popularized by Snapchat.

The company did register a good engagement from the user base it already has. The platform reaches 45% of the coveted 18- to 34-year-old demographic daily, according to data from Nielsen. It is essentially a one-to-one messaging app that’s fun and easy to use. So, the choice is to keep up with the younger generations and “their evolving behaviors and attitudes”, or grow up with its original audience as it ages, said Jessica Liu, an analyst at Forrester Research.

Part of the larger problem is that Snapchat has been trying to expand beyond its core areas. On Wednesday, the CEO of Snapchat’s parent company finally responded.