Snap Inc. today announced its Q3 2017 earnings, missing big compared to Wall Street expectations. The company added just 4.5 million new users during the quarter, compared to expectations of 8 million. The company’s ad rates also took a nose dive, down 60 percent year-over-year.
In an effort to help mitigate the slowing growth, Snap CEO Evan Spiegel announced that a major redesign is on the way for the app…
In Snap’s investor release, Spiegel acknowledged long-standing criticism about Snapchat being hard to use. In an effort to change that perception, Spiegel says the company is currently working on a major redesign of its application that will make it significantly easier to use.
One thing that we have heard over the years is that Snapchat is difficult to understand or hard to use, and our team has been working on responding to this feedback. As a result, we are currently redesigning our application to make it easier to use.
Snap explained that the redesign will likely be “disruptive” to its business in the short-term as it can’t predict how user behavior will adapt to the redesign. Spiegel notes, however, that Snap is willing to take this risk because of the potential long-term benefits:
There is a strong likelihood that the redesign of our application will be disruptive to our business in the short-term, and we don’t yet know how the behavior of our community will change when they begin to use our updated application. We’re willing to take that risk for what we believe are substantial long- term benefits to our business.
Details about the redesign are unclear at this point, but Spiegel did note that one goal is to improve content discovery while “still maintaining the exploratory nature” of Snapchat.
As part of the redesign I mentioned earlier, we are going to make it easier to discover the vast quantity of content on our platform that goes undiscovered or unseen every day. We think that there is a big opportunity to surface some of this content in a personalized and more relevant way, while still maintaining the exploratory nature of our service.
Snap also promised improvements to its streaming architecture for Story playback, which it believes should help growth in emerging markets where high-speed wireless connectivity isn’t prevalent.
Elsewhere, Snap’s Q3 earnings revealed $207.9 million in revenue – dramatically lower than the $235.5 million that investors expected. The company also revealed that it lost nearly $40 million on its Spectacles hardware glasses, which it has some 300,000 units of sitting unsold.
There’s no word on when Snapchat’s major redesign will launch.