In its first results since floating, Snap said the number of daily active users rose just 5% to 166 million compared with the last three months of 2016.

That was two million fewer than expected, but 36% higher than the same period last year.

The news sent shares tumbling more than 20% in after-hours trading in New York.

Snap’s adjusted loss of $188.2m was about $10m higher than analysts had expected, while the net loss soared to $2.2bn from $104.6m due to costs associated with the IPO earlier this year.

Revenue rose 286% for the quarter to almost $150m, but was also short of forecasts by about $9m.

Evan Spiegel, co-founder and chief executive, said on a conference call the company had been working on performance improvements and promoting its Android app, which could offer more growth globally compared with Apple’s iOS.

“We still have a lot of work to do, but we are excited by the amount of progress we have made in such a short time,” he said.

Asked if he feared Snap would be crushed by Facebook, Mr Spiegel replied: “You have to get comfortable with the fact that people are going to copy you if you make great stuff. Just because Yahoo has a search box, it doesn’t mean they’re Google.”

Many analysts remained sceptical of Snap’s long-term prospects. Ross Gerber of Gerber Kawasaki tweeted: “Snap user growth is almost zero. Losing $50 mil a month. This is so poorly run. Run and hide. This is worse than Twitter.”

Snapchat launched in 2012 as a mobile app that allows users to send photos that vanish within seconds.

On their first day of trading in New York in March, Snap shares closed 44% higher at $24.48, valuing the company at $28bn. The $3.4bn it raised made the float the richest US technology company listing since Facebook five years earlier.

The shares closed at $22.98 on Wednesday, but are likely to sink on Thursday following the 23% fall in after-hours trading to $17.65.

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Source: BBC

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