Snap shares were volatile in post-market trading after the company beat earnings estimates, but daily active users (DAUs) fell due to redesign issues.

The company also issued revenue guidance for the first time, but it was lower than estimated. It advised third-quarter revenue at $265 million to $290 million, shy of the FactSet estimate of $289.2 million at the midpoint. EBITDA was estimated at $185 million to $165 million, which was ahead of the FactSet estimate of $178.9 million at the midpoint.

The company reported its second-quarter earnings after the bell on Tuesday:

Loss per share: 14 cents vs. 17 cents, per a Thomson Reuters consensus estimate

Revenue: $262 million vs. $250.4 million, per a Thomson Reuters consensus estimate

Global DAUs: 188 million vs. 192.0 million, according to StreetAccount and FactSet estimates; a decline from last quarter's figure of 191 million.

ARPU: $1.40 vs. $1.30, according to StreetAccount and FactSet estimates

Shares went down as much as 11 percent after the report was released, but shot back to up 11 percent. During an earnings call with analysts, shares were mostly in the red down as much as 6 percent.

Snap boosted its average revenue per user (ARPU), which was up 34 percent year over year. The company also showed double digit revenue growth, which increased 44 percent year-over-year. Advertising revenue was up 48 percent year-over-year.

But Snap is facing increasing competition especially from Facebook-owned Instagram. Instagram Stories, which is a similar feature to Snapchat's main capabilities, had twice as many DAUs in June despite debuting five years later. Instagram also added a section for longer videos called IGTV, which rivals Snapchat Stories.

This past quarter also included the enactment of the General Data Protection Regulation (GDPR) in the European Union, a set of regulations that gave people in the region more control over their online data. Facebook and Twitter's European daily active user rates dipped in part due to GDPR. Snap's North American DAUs declined from 81 million last quarter to 80 million this quarter, while European numbers also went down from 62 million to 61 million.

Note: CNBC parent company NBCUniversal is an investor in Snap.



