Snap is redesigning its disappearing-message app Snapchat in an attempt to reach a broader audience, going back to the drawing board as Wall Street clobbered it for another quarter of slowing user growth.
The Venice, California-based firm, whose March stock market debut was the hottest of any tech stock in years, reported revenue and user growth for the third quarter well below Wall Street expectations as it struggles to compete with Facebook Inc's Instagram.
Snap's shares tumbled as much as 20 per cent in after-hours trading, before paring losses to trade at $12.57. Snap went public at a price of $17 a share.
Snap has disappointed investors each quarter of its brief existence as a public company.
User growth in the last three months was well below what investment analysts expected. Daily active users rose to 178 million in the third quarter from 173 million in the second quarter. Analysts had expected 181.8 million, according to research firm FactSet.
Chief Executive Evan Spiegel said the company was launching the redesign after hearing for years that Snapchat was difficult to understand or hard to use.
"We are going to make it easier to discover the vast quantity of content on our platform that goes undiscovered or unseen every day," Spiegel told analysts on a conference call.