Snapchat First-Quarter Report Shows Evidence of Facebook Threats

The Snapchat story just became more complex.

Snap Inc., the parent of Snapchat, is scheduled to report quarterly earnings, its first since going public in March, after the market closes today, and analysts are expecting significant results.

The consensus is revenues for Snap will record about $158 million in first-quarter, according to FactSet, more than quadrupling from the $38.8 million in the same period last year, according to a public filing Snap revealed before its IPO.

While the number is impressive based on the same period last year, it is smaller than Snap’s $165.7 million of fourth-quarter revenue.

This decrease can be attributed, in no large part, to Snapchat’s main competitor Facebook. In mid-April, Facebook said its Instagram Stories application, which competes directly with Snapchat Stories, broke the 200 million user mark among daily active users. In its IPO prospectus, Snap said it had 158 million daily users, but has not updated the figure since then.

These stats, coupled with the financial impact between quarters, will conceivably ratchet up the pressure on Snap to address the growing threat from Facebook and Instagram.

Over the past year, Facebook has attempted to copy many of its features, such as Snapchat’s Stories — collections of Snaps that play in chronological order. And, according to a survey by Goodwater Capital, the clones are growing more popular.

In fact, 25% of respondents said they prefer Stories on one of Facebook’s platforms, such as Instagram, compared with 12% who prefer Snapchat’s Stories.

The Snapchat Stories is an integral part of the app’s experience, as well as a notable form of marketing revenue. Snapchat needs to find an effective way to fight the clone wars.

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