Social messaging service Snap (NYSE: SNAP) continues to flounder. The company had listed on the NYSE in March this year amid much speculation. Snap listed when its business model was yet to prove successful – it was not only missing profits but was also failing to deliver growth in other metrics. Recently reported quarterly results are no better, and the stock continues its downward trajectory.

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Snap’s Financials

For the third quarter of the year, Snap’s revenues grew 62% to $207.9 million, falling short of the analysts’ forecast of $236.9 million. The company ended with a net loss of $443.2 million, which was more than three times the loss reported a year ago.

Perhaps one of the big shockers from Snap’s report was the $40 million write-off the company absorbed for its Spectacles business. Last month, news reports revealed that the company had a big inventory of Spectacles and an additional $29 million purchase commitment related to hardware products. Snap did not disclose the details of its Spectacles business, but the $40 million write-off suggests that it was sitting on “hundreds of thousands of units in inventory”.

Among other metrics, daily active users came in at 178 million, compared with 158 million a year ago and 173 million a quarter ago. The market was looking for 181.8 million daily active users for the quarter. Snap’s average quarterly revenues per user came in at $1.17, compared with $0.84 a year ago, and fell short of the market’s forecast of $1.30.

Snap App Revamp

Part of the reason for Snap’s slowdown has been the rise in competition. Facebook’s Instagram Stories and WhatsApp Status have both affected Snap’s performance, especially considering that both the services have a much bigger user base. Instagram has more than 500 million daily active users and WhatsApp has over a billion. Facebook reported that both Instagram Stories and WhatsApp Status had more than 250 million daily active users already. Here is an interesting infographic, courtesy Statista that shows Snap’s disastrous performance when compared with its competitors.

Snap realizes the challenges it is facing and is working on revamping its offerings. It is looking to simplify its app, make it more intuitive, and offer more personalized and relevant content for the users. Further, to improve user engagement, Snap is working on paying its top creators. Snap’s management realizes that the makeover may be “disruptive” to its business in the short-term, but is hopeful that the redesign would lead to content discovery and benefit the company in the long run.

It is also improving the content in its service. It entered into a two year agreement with ESPN that will allow ESPN to launch its flagship SportsCenter program on Snapchat. SportsCenter will air twice a day on Snapchat during weekdays and once a day on weekends. It will have a roster of six hosts and provide commentary and perspectives from ESPN anchors Katie Nolan and Elle Duncan and ESPN Radio host Jason Fitz.

Despite the weak performance, Snap was able to find a new investor. Recently, Chinese messaging and gaming giant Tencent bought a 12% stake in the service. However, the news failed to push the stock upwards. Its stock is trading at $12.46 with a market capitalization of $15 billion. It had peaked to $29.44 soon after listing at $17 in March. The stock fell to a low of $11.28 in August this year. Before listing, Snap had raised $2.65 billion in its last funding round in May 2016 that valued it at $20 billion.