Snap Inc revealed that the Snapchat app had added just four million new users in Q1 2018 – half of those expected for the quarter. In addition, the company highlighted that growth and revenues could be slower during Q2 sending shares in Snap Inc tumbling by 17%.
Although overall revenue grew over half to $230.7 million, it came in below analyst expectations.
The company cited user confusion and anger over the redesigned app as well as advertiser apprehension for the weak results.
Snapchat had been redesigned in an effort to boost user engagement and attract new users and subsequently advertisers to join the platform. However, the move backfired as it left many existing users frustrated and confused.
A whopping one million users signed a petition urging the app to take back the redesign.
Lloyd Walmsley, an analyst at Deutsche Bank told Reuters:
“It is not clear to us why the app redesign – the first product Snap ever tested at scale – was rolled out broadly, and we are even less clear on why it hasn’t been more aggressively rolled back already.”
However, CEO Evan Spiegel was adamant that the redesign was a step forward for the app’s communication and its media platform. He said in a conference call:
“The redesign created a lot of new opportunities, and we look forward to continuing our efforts to refine and improve Snapchat.”
Meanwhile, rival Instagram reported a profit increase of 63% last week as well as increasing user numbers.