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Snapchat's users keep slipping away

The social media giant acknowledges that its user base continues to shrink, raising concerns about its future.

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Snapchat app logo.
Carl Court / Getty Images

Snapchat isn't the social media powerhouse it used to be.

The tech firm said Thursday that 186 million users logged into the ephemeral messaging app daily in the third quarter, down from 188 million users in the previous quarter. It's the second quarter in a row that Snapchat has seen a drop in the number of daily active users

Snap CEO Evan Spiegel said the drop mainly came from users who use the app on Android phones. The tech firm has been working on a new version of the app for Android users, but executives didn't say exactly when it would be released.

"The Android community represents a global growth opportunity for us and we are making good progress testing the application in select markets. We look forward to rolling it out when it's ready," Spiegel said during a conference call with analysts.

In August, the company reported its first decline in daily active users, which Spiegel blamed on an unpopular redesign of the app. At the same time, it's been facing stiff competition from Facebook-owned Instagram, which also has a feature that lets users post photos and videos that vanish in 24 hours.

The tech firm is expecting that daily active users will continue to fall in the fourth quarter.

Snapchat, which makes its money from ads, has been trying to get teens to spend more time on the site. In October, it released a list of 12 new shows making their debuts this fall. The company even sells video-capturing sunglasses called Spectacles

While the app is popular among 13- to 34-year-olds in the US and Europe, Spiegel said the company is trying to reach billions of people worldwide who aren't on the app. 

"We're trying to get the right mix of content," he said.

The good news on Thursday was that Snap's third-quarter net loss and revenue did better than expected.

Snapchat reported an adjusted loss of 12 cents per share, which was better than the loss of 14 cents per share analysts surveyed by Thomson Reuters expected on average. The company grew its revenue year-over-year by 43 percent to $298 million, above the $283.21 million forecast.

Still, investors weren't happy. The company's stock dropped more than 8 percent to $6.38 per share in after-hours trading.

First published Oct. 25 at 1:27 p.m. PT.
Update at 3:11 p.m. PT
: Included remarks from Snap's conference call.

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