Snap’s Q3 2017 was awful, but a redesigned Snapchat is en route

Snap doesn’t know how to make money. Well, it doesn’t know how to make a lot of money while not spending so much money. When the company went public earlier this year, it openly admitted that it may never become profitable. So there’s no surprise in seeing Snap’s struggles continue into the third quarter of 2017.

Snapchat and the Spectacles, the only two products offered by Snap, aren’t generating enough revenue to cover anywhere close to the company’s expenses.

The third quarter this year was even worse than the same time last year. Snap’s revenue increased to $207.9 million, but its expenses grew big-time. Expenses for the last quarter were almost $670 million. So that led to a net loss of $443.1 million. The company says its advertising business is on the rise, but currently it’s not providing decent returns.

A big part of Snap’s loss came from the Spectacles. The pair of smart glasses caused the company to lose nearly $40 million. You may recall that, despite outselling the original iPod, there’s a massive amount of unsold Spectacles sitting in warehouses.

Only a little over 150,000 units of the smart glasses were sold as of October 2017. Based on the write-down reported, it appears there are in the neighborhood of 300,000 pairs remain on-hand. Snap could be launch a fire sale for the Spectacles in the coming weeks as holiday shopping is underway. Still, it’s not a good sign for a company that has a 150-person hardware team.

Article source: https://www.technobuffalo.com/2017/11/08/snap-q3-2017-earnings-snapchat-redesign/