Snap Inc.'s stock plunged 18% in extended trading Thursday after the social-media company reported a decline in revenue as it retools its ad platform.
Revenue dropped 7% to $988.6 million, from $1.06 billion a year ago. Analysts surveyed by FactSet had expected on average a net loss of a penny a share on revenue of $1 billion.
Sales demand in the first quarter was "disrupted" by changes Snap made to its ad platform to drive more click-through conversions. "While these changes are disruptive in the short term, we are optimistic that our ad platform improvements are laying the foundation for future growth," the company said in a letter to investors.
"As we look forward to Q2, we expect to face continued disruption in demand related to the advertising platform changes," Snap said, offering a revenue range of between $1 billion and $1.09 billion, with an internal forecast of $1.04 billion, implying a 6% decline year-over-year. FactSet analysts are expecting on average $1.1 billion in second-quarter revenue.
During an abbreviated conference call late Thursday, at least one analyst pressed Snap Chief Executive Evan Spiegel on when the company expects to turn a profit and resume growth. Spiegel pointed to Snap's user community and their engagement, as well as changes to its ad platform to spur sales.
Snap (SNAP), which announced a slew of AI products last week, reported a fiscal first-quarter net loss of $328.7 million, or 21 cents a share, compared with a net loss of $359.6 million, or 22 cents a share, in the year-ago quarter. Adjusted earnings were a penny a share.
Snap also reported a 15% rise in daily active users to 383 million.
Shares of Snap have advanced 17% so far this year, while the broader S&P 500 index is up 7.7%.
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