Snap CEO Evan Spiegel doesnt want Snapchat to become more of a global hit, at least not yet.
The social messaging company’s CEO tried to reassure analysts who are worried about Snap’s failure to add as many users as Wall Street had hoped by using an unusual argument. In essence, he’d be happier if the service grew slower, not faster like what the CEOs of most hot companies want.
In its second quarter earnings on Thursday, Snap (snap) said that it had 173 million daily active users versus the 175.2 million that Wall Street had forecast. Partly because of the shortfall, Snaps stock tumbled nearly 17% in after-hours trading to $11.44.
It didn’t help that quarterly losses quadrupled to a whopping $443.1 million in the latest quarter from $115.9 million during the same period a year earlier.
Investors look at Snaps new user numbers as an important metric to gauge the companys future growth. It’s also used to compare Snap to its rival, Facebooks (fb) competing year-old Instagram Stories feature, which now has 250 million daily active users and appears to be stealing much of Snap’s thunder.
Get Data Sheet, Fortunes technology newsletter.
Spiegal explained to analysts in a conference call that Snap pays more attention to how much revenue each individual user brings in rather than the mere total number of daily active users. In the current quarter, Snap collected $1.05 in revenue per user, up 109% year-over-year. But that was still slightly below analyst expectations of $1.07.
For every user Snap adds, it must pay more money to its cloud-computing providers that Snap’s service is built on top of. But because the company only takes in a small amount of money for every user, adding more creates bigger cloud billsand ballooning losses.
A sudden influx of users is just not appealing at this stage of the business, Spiegel said. He didnt say what cloud hosting providers he was referring to in terms of the big bills, but Snap has previously agreed to spend $1 billion over the next five years on Amazon Web Services (amzn). This is on top of the $400 million it is spending to use Googles (goog) competing cloud computing services over a five-year period.
Because of the revenue per user problem, Spiegel said he is taking a wait and see approach in terms of expanding much outside of the United States and Canada. It doesnt make sense now, but may make sense in the future, he said. Snap brought in $148 million in North American sales in the second quarter, followed by $22 million in European sales, and $12 million for the rest of the world.
Spiegel is hopeful that the companys nascent advertising business, on which Snap depends, will eventually become a big hit. Investing more in overseas markets will become more appealing as the mobile [advertising] markets improve, he said.
For many investors, that improvement couldn’t come too soon.
See original here:
Snap CEO Evan Spiegel Makes A Case For Slow User Growth – Fortune
- Cloud Hosting by Perry Hosting - December 11th, 2017
- What Is Cloud Hosting? | GoDaddy - YouTube - December 11th, 2017
- Linux VPS | Best Managed Linux Cloud Hosting - RoseHosting - November 24th, 2017
- Cloud hosting platforms. Part one: Pantheon | ADCI Solutions - November 24th, 2017
- Get to know Linode, the new (big) kid in town - Technical.ly - September 7th, 2017
- 500 Cloud Operators, Managed Service Companies and Hosters to Gather at the 13th Annual Hosting & Cloud ... - Benzinga - September 7th, 2017
- Cloud ERP: The rising alternative to hosting your own - Networks Asia - September 7th, 2017
- Melbourne Server Hosting Renamed to iomart - Web Host Industry Review - September 6th, 2017
- Cloud ERP: The rising alternative to hosting your own - CIO Australia - September 6th, 2017
- Dean Dorton Technology named to Sage Intacct President's Club, Rookie of the Year and New Partner of the Second ... - The Lane Report - September 6th, 2017
- Microsoft Signs Deal to Put More Apps on Huawei's Cloud in China - eWeek - September 6th, 2017
- Cloud Hosting Providers CommsTrader's UK Channel Guide 2017 - CommsTrader - September 5th, 2017
- Huawei announces Microsoft cloud apps partnership - ZDNet - September 5th, 2017
- Trump Effect Could Cost US Cloud Providers Over $10 Billion: Report - Web Host Industry Review - September 2nd, 2017
- Cost Reduction Strategies on Java Cloud Hosting Services - InfoQ.com - August 30th, 2017
- Cloud Native The Perfect Storm for Managed SD-WAN Services - Network World - August 30th, 2017
- Why 2017 is the Year to Understand Cloud Computing - Business 2 Community - August 28th, 2017
- President Trump Could Cost US Cloud Computing Providers More Than $10 billion by 2020 - The Data Center Journal - August 28th, 2017
- What You NEED To Look For In A Cloud Hosting SLA - TG Daily (blog) - August 27th, 2017
- President Trump Could Cost US Cloud Computing Providers More ... - The Data Center Journal - August 27th, 2017
- State of Cloud - 2017 - Read IT Quik - August 22nd, 2017
- President Trump could cost US cloud computing providers more than $10 billion by 2020 - Bdaily - August 22nd, 2017
- Microsoft No Longer a PC Company with Deals Like Halliburton, Says Credit Suisse - Barron's - August 22nd, 2017
- Did Snap Make a Mistake With Its $3 Billion in Cloud Contracts? - Madison.com - August 21st, 2017
- Right Networks continues focus on tech improvement with new CIO - Accounting Today - August 21st, 2017
- Altinity Provides Cloud Version of ClickHouse on Kodiak Data MemCloud - Markets Insider - August 21st, 2017
- NASA calls on cloud for online eclipse streaming - GCN.com - August 21st, 2017
- Cloud Hosting Reviews and Comparisons | Cloud Hosting Directory - August 19th, 2017
- Free cloud hosting: comparing the top providers offer - August 19th, 2017
- Microsoft Expands HPC Cloud Portfolio With Cycle Computing Acquisition - eWeek - August 19th, 2017
- UC San Diego Health: Moving Its EHR to the Cloud, Strategically - Healthcare Informatics - August 19th, 2017
- Rackspace's first in-house attorney for international moves on - San Antonio Business Journal - August 19th, 2017
- Microsoft Acquires Cycle Computing to Bulk Up its HPC Cloud Services - eWeek - August 18th, 2017
- Massive Potential Attracts International Players to Iran's Cloud Computing Market, Despite Challenges - PR Newswire (press release) - August 18th, 2017
- These Inventors Need To Conquer Cryptocurrency To Change Cloud Computing - Celebrity Net Worth - August 18th, 2017
- 360 Cloud Solutions now offers Adaptive Insights - Accounting Today - August 18th, 2017
- Hackers breach third party cloud vendor TekLinks - Healthcare IT News - August 18th, 2017
- Stronger security and disaster planning fuel healthcare's migration to the cloud - Healthcare IT News - August 16th, 2017
- Hackers hit dermatology practice through cloud vendor - Information Management - August 16th, 2017
- Hackers hit dermatology practice through cloud vendor - Health Data Management - August 15th, 2017
- Unisecure Hybrid Cloud Hosting Introduces New Integration And Collaboration Support. - HostReview.com (press release) - August 14th, 2017
- CenterGrid Names Kevin Westendorf As Chief Technology Officer - Markets Insider - August 14th, 2017
- Earth911.com - Earth911.com - August 14th, 2017
- Commerce Department Plans to Move Cybersecurity to the Cloud - FedTech Magazine - August 13th, 2017
- RiverMeadow and WSM Announce Agreement to Facilitate Cloud Migrations - GlobeNewswire (press release) - August 11th, 2017
- Driving operational excellence with your cloud vendors - Network World - August 10th, 2017
- Amazon jumps on Kubernetes bandwagon - ZDNet - August 10th, 2017
- Epic Move: UC San Diego Health Transitions to Cloud Technology - UC San Diego Health - August 10th, 2017
- St. Cloud to Host Summer Sizzler Downtown Art Crawl - WJON News - August 10th, 2017
- Cloud management platforms offer a unified approach to hybrid IT - TechTarget - August 10th, 2017
- CA Health System Begins Cloud-Based Epic EHR Implementation - EHRIntelligence.com - August 10th, 2017
- Home Office seeks partner for AWS switch after current hosting ... - www.channelweb.co.uk - August 9th, 2017
- Planning Your Journey to the Cloud - TV Technology - August 9th, 2017
- Marias Technology adds Microsoft Azure to its Hosting Services - GlobeNewswire (press release) - August 9th, 2017
- IBM CIO leaves for AWS and Big Blue flings sueball to stop him - The Register - August 9th, 2017
- How To Win at Cloud Hosting in a Microsoft-AWS-Google World - Redmond Channel Partner - August 8th, 2017
- Epic Move: UC San Diego Health Transitions to Cloud Technology - Newswise (press release) - August 8th, 2017
- Global Health wins contract to deploy cloud system at Sydney hospital - Proactive Investors Australia - August 8th, 2017
- As Tech Execs Rally Around Kushner, Government Cloud Adoption Still Has Ways to Go - Windows IT Pro - August 8th, 2017
- Heavy clouds in IT world make it rain gold for UPS box manufacturers - The Register - August 8th, 2017
- Project Manager - Amazon, Google, Microsoft Cloud Hosting - Dorking and Leatherhead Advertiser - August 6th, 2017
- From Public Cloud to Hybrid IT Straight From the Horse's Mouth - InfoWorld - August 6th, 2017
- How companies can boost their website in China's clouded market - Cloud Tech - August 4th, 2017
- Cloud computing facility launched - Times of India - August 4th, 2017
- Aerohive Achieves Unmatched Scale and Flexibility in Cloud-Managed Networking - Patch.com - August 4th, 2017
- 'UK cloud services are strong and ready to compete with the world's best tech economies', Cloudreach CEO says as ... - Data Economy - August 3rd, 2017
- Marijuana startup Lemonhaze leverages Bizspark to jump from AWS to Azure - OnMSFT (blog) - August 3rd, 2017
- US retailers increasingly switching to public cloud hosting to free up resources to develop new services - InternetRetailing.net - August 2nd, 2017
- Mozilla's Send is basically the Snapchat of file sharing - The Verge - August 2nd, 2017
- Why Facebook Is Withdrawing WhatsApp from the IBM Cloud - Market Realist - August 2nd, 2017
- You need a cloud exit plan, even for AWS, Google, Microsoft, or IBM ... - InfoWorld - August 2nd, 2017
- Cloud Hosting - Cloud Web Hosting Services - Bluehost - August 1st, 2017
- CCS points users of major expiring frameworks towards G-Cloud - PublicTechnology.net - August 1st, 2017
- Secure Cloud Storage Service India Benefits All Types Of Businesses - HostReview.com (press release) (blog) - July 31st, 2017
- Cyber Extortion: Is Your Business Software At Risk? - Techzone360 - July 31st, 2017
- Microsoft's data centre investment to boost SA cloud adoption - IT News Africa - July 12th, 2017
- BT Named A Leader In 2017 Magic Quadrant For Managed Hybrid Cloud Hosting, Europe - BT Retains Its Position As ... - Exchange News Direct - July 11th, 2017
- In Illinois, cloud computing debate could open next chapter of utility rate reform - Utility Dive - July 11th, 2017
- Atlantic Metro Expands CloudDirect(SM) Suite Nationwide - Marketwired (press release) - July 11th, 2017
- Microsoft Launches Azure Local Cloud Solution - CFO - July 11th, 2017