Snap shares plunged 14% on Thursday after the social media firm reported more than $400m (£310m) in quarterly losses and fewer than expected users.
The share price fall extended a decline that started almost immediately after Snapchat started trading on the stock market this spring.
The firm reported 173 million daily users, up 4% on the prior quarter.
But the company is struggling with fierce competition from Facebook, which offers similar features.
Snap’s stock, which was priced at $17 for its public offering in March, is now trading at less than $14.
On Thursday, chief executive Evan Spiegel pledged that he and fellow co-founder Robert Murphy would not sell any of their own shares this year, as a sign of confidence in the firm’s prospects.
The shares were worth billions at the time of the IPO.
“We believe deeply in the long-term success of Snap,” he told analysts on a call after the results were released.
Snap made its name as a messaging app, with texts that would disappear. It now offers video stories, maps and other features.
The firm said it is working to woo advertisers with low prices and evidence that its ads are working – features it hopes will set it apart from rivals.
Revenue over the three months to the end of June was $181.7m, more than double the same period in 2016.
But expenses grew even faster, reaching more than $630.6m for the quarter, including expenses related to stock-based compensation.
Snap’s user base increased by more than 20% year-on-year. But the firm added just seven million new users in the quarter, compared to eight million in the first three months of the year.
Shares in the firm fell more than 14% in after-hours trade.
Mr Spiegel said the company was making “a lot of progress”.
He estimated that a quarter of people with smart phones in the US, UK and France use Snapchat every day, with users typically spending more than 30 minutes daily on the site.
Snap is not the only young company that has stumbled after going public while facing off with one of the tech giants.
The prepared meal company Blue Apron, which started trading in June, has also lost much of its value.
Analysts say Amazon’s plan to acquire Whole Foods, combining its delivery strength with a well-known grocer, has dimmed its prospects.
On Thursday, in its first earnings report since its stock market debut, Blue Apron reported more than $238m in revenue for the three months to the end of June and losses of $31.6m.
Its shares fell more than 17%, to $5.14, compared to $10 price set at the IPO.