Napping Snap stock falls on revenue miss

Shares of Snap Inc. plunged nearly 20 percent in after-hours trading Tuesday after the tech startup sorely missed Wall Street’s forecasts for sales and user growth.

The operator of the Snapchat app — which has been dogged by worries that Facebook’s Instagram app has been knocking off Snapchat’s features and stealing its users — reported revenue of $207.9 million, well short of expectations of $235.5 million.

Snap said its daily active users — famously fond of the app’s disappearing photos and bunny-ear filters — rose 17 percent year-over-year to 178 million in the third quarter ended Sept. 30. An increase of 4.5 million from the second quarter fell short of the 8 million additional users expected by analysts.

In a statement, Chief Executive Evan Spiegel pinned much of the blame on the app’s functionality and said Snapchat would soon be undergoing a redesign.

“One thing that we have heard over the years is that Snapchat is difficult to understand or hard to use, and our team has been working on responding to this feedback,” he said.

Spiegel added, however, that there is “a strong likelihood” that the redesign would be “disruptive” to Snapchat’s business in the short term.

“We don’t yet know how the behavior of our community will change when they begin to use our updated application,” he said. “We’re willing to take that risk for what we believe are substantial long-term benefits to our business.”

Snap lost $443 million in the quarter,, including a $40 million writedown on unsold Spectacles sunglasses.

Late last month, Snap laid off 18 workers from its recruiting division as it looked to slow hiring in 2018.