Snap crashes to a record low after its earnings disaster

  • Snap is set to open Wednesday near a record low after its earnings disaster. 
  • The company attributed its revenue miss to the Snapchat redesign. 
  • It warned that its second-quarter growth rate will decelerate. 
  • Watch Snap trade in real time here

Snap shares are trading lower by 21% and at a record low Wednesday after a disastrous first-quarter earnings report. The stock hit $10.96 a share early Wednesday, slipping below its previous low of $11.28.

The company reported revenue of $230.7 million, missing the Wall Street estimate of $244.93 million. The company attributed the decline in revenue to seasonality and the app redesign. "Revenue was $230.7 million in Q1 2018, up 54% year-over-year driven by growth in Snap Ads, and down 19% sequentially, primarily due to seasonality and our redesign," Snap's earnings release said.

16 PHOTOS
Snapchat CEO Evan Spiegel
See Gallery
Snapchat CEO Evan Spiegel
Snap cofounders Evan Spiegel (C) and Bobby Murphy (L) sign a book before ringing the opening bell of the New York Stock Exchange (NYSE) with NYSE Group President Thomas Farley shortly before the company's IPO in New York, U.S., March 2, 2017. REUTERS/Brendan McDermid
Founder of Snap Inc. Evan Spiegel attends the 2017 Berggruen Prize Gala at the New York Public Library on December 14, 2017 in New York. / AFP PHOTO / ANGELA WEISS (Photo credit should read ANGELA WEISS/AFP/Getty Images)
Evan Spiegel, co-founder and chief executive officer of Snap Inc., stands on the floor of the New York Stock Exchange (NYSE) during the company's initial public offering (IPO) in New York, U.S., on Thursday, March 2, 2017. Snap Inc., maker of the disappearing photo app that relies upon the fickle favor of millennials, jumped in its trading debut after pricing its initial public offering above the marketed range. Photographer: Michael Nagle/Bloomberg via Getty Images
CULVER CITY, CA - NOVEMBER 12: Model Miranda Kerr (L) and Snapchat founder Evan Spiegel attend the Fifth Annual Baby2Baby Gala, Presented By John Paul Mitchell Systems at 3LABS on November 12, 2016 in Culver City, California. (Photo by Stefanie Keenan/Getty Images for Baby2Baby)
NEW YORK, NY - FEBRUARY 01: CEO and co-founder of Snapchat Evan Spiegel speaks onstage with The New Yorker staff writer Ken Auletta at the American Magazine Media Conference at Grand Hyatt New York on February 1, 2016 in New York City. (Photo by Larry Busacca/Getty Images for Time Inc)
NEW YORK, NY - FEBRUARY 01: CEO and co-founder of Snapchat Evan Spiegel speaks onstage with The New Yorker staff writer Ken Auletta at the American Magazine Media Conference at Grand Hyatt New York on February 1, 2016 in New York City. (Photo by Larry Busacca/Getty Images for Time Inc)
NEW YORK, NY - FEBRUARY 01: The New Yorker staff writer Ken Auletta and CEO and co-founder of Snapchat Evan Spiegel attend the American Magazine Media Conference at Grand Hyatt New York on February 1, 2016 in New York City. (Photo by Larry Busacca/Getty Images for Time Inc)
SUN VALLEY, ID - JULY 08: Evan Spiegel, co-founder and CEO of the mobile application Snapchat, attends the Allen & Company Sun Valley Conference on July 8, 2015 in Sun Valley, Idaho. Many of the world's wealthiest and most powerful business people from media, finance, and technology attend the annual week-long conference which is in its 33rd year. (Photo by Scott Olson/Getty Images)
SAN FRANCISCO, CA - OCTOBER 08: Snapchat CEO Evan Spiegel speaks onstage during 'Disrupting Information and Communication' at the Vanity Fair New Establishment Summit at Yerba Buena Center for the Arts on October 8, 2014 in San Francisco, California. (Photo by Kimberly White/Getty Images for Vanity Fair)
SAN FRANCISCO, CA - OCTOBER 08: Snapchat CEO Evan Spiegel speaks onstage during 'Disrupting Information and Communication' at the Vanity Fair New Establishment Summit at Yerba Buena Center for the Arts on October 8, 2014 in San Francisco, California. (Photo by Michael Kovac/Getty Images for Vanity Fair)
Evan Spiegel and Bobby Murphy attend the 'TIME 100 Gala, TIME's 100 Most Influential People In The World' at the Frederick P Rose Hall at Lincoln Center in New York City. � LAN (Photo by Lars Niki/Corbis via Getty Images)
LOS ANGELES, CA - FEBRUARY 07: CEO of Snapchat Evan Spiegel (L) and music producer Jimmy Iovine attend the Pre-GRAMMY Gala and Salute to Industry Icons honoring Martin Bandier at The Beverly Hilton Hotel on February 7, 2015 in Los Angeles, California. (Photo by Michael Kovac/WireImage)
SAN FRANCISCO, CA - SEPTEMBER 09: Evan Spiegel of Snapchat attends TechCruch Disrupt SF 2013 at San Francisco Design Center on September 9, 2013 in San Francisco, California. (Photo by Steve Jennings/Getty Images for TechCrunch)
Evan Spiegel and Bobby Murphy, developers of Snapchat (Photo by J. Emilio Flores/Corbis via Getty Images)
SAN FRANCISCO, CA - FEBRUARY 10: Jordan Crook of TechCrunch and Evan Spiegel of Snapshot (L-R) present the award for Fastest Rising Startup at the 7th Annual Crunchies Awards at Davies Symphony Hall on February 10, 2014 in San Francisco, California. (Photo by Steve Jennings/WireImage)
Snap cofounders Evan Spiegel (C) and Bobby Murphy ring the opening bell of the New York Stock Exchange (NYSE) with NYSE Group President Thomas Farley shortly before the company's IPO in New York, U.S., March 2, 2017. REUTERS/Lucas Jackson
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

Adjusted earnings-per-share came in at -$0.17, in line with expectations.

To make matters worse, Snap warned its growth trajectory will slow in the second quarter.

"We are planning for our Q2 growth rate to decelerate substantially from Q1 levels," Snap CFO Drew Vollero said, "with growth in auction impressions, partially offset by pricing for both Snap Ads and Creative Tools."

Snap is now down about 24% this year. 

NOW WATCH: Wall Street's biggest bull explains why trade war fears are way overblown

See Also:

Read Full Story