Snap continues to pay for Snapchat’s unpopular redesign

Snapchat’s massively unpopular redesign continues to hurt the company.

Snap disclosed Tuesday that the app lost 3 million of its daily active users due in large part to its controversial redesign.

The decline, which marked Snapchat’s first-ever quarter of negative user growth, was reported during Snap’s second quarter earnings call. 

“We feel that we have now addressed the biggest frustrations we’ve heard and are eager to make more progress on the tremendous opportunity we now have to show more of the right content to the right people,” CEO Evan Spiegel said of the company’s subsequent attempts to walk back some of the more unpopular aspects of Snapchat’s redesign.

“One of the most important things about the redesign is that we’re surfacing the right content to the right people as quickly as possible,” said Spiegel, noting the revamp has lead to an increase in users 35 and older sticking around longer, which has long been a hope for the company.

But no matter how much he tried to spin it, Snap’s latest earnings show just how disastrous the redesign has been. Though many popular apps deal with backlash following a major update, reactions to Snapchat’s overhaul have been particularly brutal. 

The new design, which was reportedly spearheaded by Spiegel himself, prompted an outpouring of anger from users almost immediately. A change.org petition to reverse the update gained more than 1 million signatures, and several of Snapchat’s most prominent users publicly questioned the company’s future. Snap later made updates to roll back some of the more unpopular changes, but the damage was done.

The app has now lost 3 million users in the last three months — a decline that could continue into the next quarter. Snap declined to estimate user growth for next quarter, but noted that third-quarter earnings have historically “trended down” for the company.

Meanwhile, Snapchat’s chief competitor Instagram continues to soar. The company, which just marked the two-year anniversary of its own version of Stories, recently announced it had crossed 1 billion users.

Tuesday’s earnings weren’t entirely bad news for Snap. The company beat analyst expectations on revenue, reporting $262 million in revenue, compared with analysts’ expectations of $251 million.

The company also shared metrics for monthly active users for the first time, reporting 100 million MAUs in the United States and Canada. 

Snap’s stock was all over the map following its earnings. After initially shooting up more than 10 percent following the unexpected revenue beat, it then dipped to below its closing price before ticking back up slightly.

Investors, it seems, are unsure what to make of Snap’s mixed results.