Shares of Snap Inc. (SNAP) were down over 12% at $12.05 during early Friday morning trading after the social media upstart failed to meet Wall Street's expectations for the fiscal second quarter.

Snap earlier fell to an all-time low in after-hours trading Thursday after reporting after the bell that losses widened quarter-over-quarter to 36 cents per share. That was greater than Wall Street's projections for a loss of 30 cents per share. (On a non-GAAP basis, Snap reported a loss of 16 cents per share vs. expectations of a 14-cent loss). Revenue jumped 153% year-over-year to $181.7 million, but still fell short of analysts' estimated $186 million.

For an in-depth look at the results, click on over to TheStreet's Snap Earnings Live Blog.

The company added 7.3 million new users during the quarter, bringing daily active users to 173 million, but the growth was still lower than Wall Street's expectations for 174 million DAUs. Snap's new user growth also decelerated slightly from the prior period, when it added at least 8 million new users from the previous quarter. During the second quarter, Snap added the most new users from North America, reflecting CEO Evan Spiegel's strategy of focusing on gaining users in the U.S., Canada and Europe, rather than the global market. 

Snapchat's 173 million daily users continue to trail Facebook Inc.'s (FB) Instagram Stories, which now counts 250 million daily active users. So far, Spiegel has largely deflected analysts' concerns around the competition with Facebook by saying that it would rely on innovative products to differentiate itself. Investors are unlikely to settle for similar arguments when the company holds its earnings call with analysts later on Thursday.

Average revenue per user also came in below expectations, despite jumping 109% year-over-year and 16% quarter-over-quarter. ARPU was $1.05 for the quarter, falling just short of Wall Street's estimated $1.07 per user. Investors have increasingly turned their focus to Snap's ARPU, as they believe the company may be able to combat sluggish DAU growth by squeezing as much money as possible out of its existing user base. 

Elsewhere, Snap's costs continue to grow, despite the company reducing expenses related to cloud hosting contracts by 13% last quarter. Cost of revenue rose to $147 million during the second quarter, with $106 million of that coming from hosting costs. 

Snap has had a wild ride since making its splashy debut in March, when it popped 44% in its first day of trading. Initial excitement about the stock quickly faded, however, and the stock has fallen 45% since the IPO. Facebook, meanwhile, has launched a seemingly endless assault on Snap's Stories products and advertising business, causing several of Snap's lead underwriters to question its ability to stay afloat. Making matters worse, Snap failed to pass the test during its first public earnings report, when it also missed Wall Street's expectations across the board.

Wall Street analysts will likely use Thursday's earnings call to get greater clarity on Snap's product road map, its ability to scale its ad business and how it plans to buck competition with Facebook.

For its part, Snap has released several new products and ad offerings over the last several months. Snap Maps, which allows users to share their location with friends on an interactive map, has been pegged as one of the company's most promising features, but it's unclear if it presents any of the same monetizing possibilities. Snap's lenses and geofilters, which superimpose graphics over a user's face and surroundings, have been a boon for advertisers so far, helped by other, newer offerings, such as Snap's self-serve ad manager that lets brands create their own campaigns.

(This article has been updated with Friday morning premarket stock prices.)

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