Snapchat's big, controversial redesign - the one that really put us in our place by separating our social from our media - doesn't appear to have done the app much good. Snapchat still has 191 million daily users, but things aren't looking up for the company that Facebook has done everything in its power to destroy.
Snapchat is growing slower than ever. According to parent company Snap's latest earnings report, Snapchat's user base grew by about two per cent in the last three months - down from the five per cent quarterly growth it reported in February, down from the five per cent figure Snapchat shared this time last year, and down from the three and four per cent growth stats it reported last November and August, respectively.
In its prepared remarks ahead of a call with investors, Snap's CEO Evan Spiegel began by reiterating the rationale behind the redesign that led to a petition signed by 1.2 million users asking for its reversal.
"This new design is driven by our fundamental belief that separating friends from professional content creators is important to both our mission and the long-term growth of our business," said the CEO. But as expected, the redesign has been pissing users off.
"While we had an average of 191 million daily active users in Q1," said Spiegel, "our March average was lower, but still above our Q4 average. We are already starting to see early signs of stabilisation among our iOS users as people get used to the changes, but still have a lot of work to do to optimise the new design, especially for our Android users."
However, in a bright spot, Spiegel said: "We have also started to realise some of the positive benefits [of the redesign], including increased new user retention for older users."
Right. Nothing screams Snapchat is totally fine like "early signs of stabilisation" and happier "older users". Ditto for the recent Spectacles update that gave us absolutely zero reasons to get excited about Snap's vision for hardware.
Helpfully, Snap's CFO provided some "near-term observations on our business". (Emphasis ours.)
First, as we think about our year-over-year revenue growth rates, we are planning for our Q2 growth rate to decelerate substantially from Q1 levels, with growth in auction impressions, partially offset by pricing for both Snap Ads and Creative Tools.
After reporting less revenue for the quarter and losing more money overall than investors expected, Snap's stock fell by more than 16 per cent in after-hours trading today.
Snapchat isn't dead yet. On growth, the service doesn't even quite look like late-2017 Twitter (which has since seen two straight profitable quarters). But Snap can't get away with this crap forever; it can't keep losing money and stop growing. And if the social network cannot turn things around, it's clear where it's headed.