Snap Inc., the parent of messaging service Snapchat, made plenty of shareholder money vanish Wednesday, as the company reported a whopping $2.2 billion quarterly loss that sent its shares plummeting more than 20 percent in after-hours trading.
On the company’s first-ever earnings call (it went public in March), Snap CEO Evan Spiegel tried to explain away some of the losses, pointing at the company’s more than $800 million in research and development spending in the quarter as it worked to improve its user experience on Android devices.
Spiegel told analysts and investors that the company spent much of its first quarter focusing on making the Android Snapchat experience better and “managed to make some headway in rest of world largely due to improvement on Android.” He said Android users are up to 33 percent of the company’s total users, from 20 percent the previous quarter, even as Snap added just 8 million users over the last three months.
The improvements are “generating an increase in overall time spent and engagement,” Spiegel said on the call.
However, according to a lawsuit filed by former Snap employee Anthony Pompliano, Spiegel hasn’t always been bullish on international, typically Android-heavy markets.
Pompliano alleges that Spiegel said Snapchat is “only for rich people” and that he had no desire to “expand into poor countries like India and Spain.”
But based on Snap’s slowdown in adding Apple-using “rich people,” Spiegel may have no choice but to look outward.