Some analysts praised the company's progress in user growth and revenue, even though it failed to meet market expectations.
Net losses for the company came in at $443m, steeper than the $380m analysts had forecast for Snap ahead of the report.
But it wasn't all bad news. The business had revenue of $181.70 million during the quarter, compared to the consensus estimate of $186.49 million.
Investors have always been sceptical of Snap's long-term prospects and its ability to turn rising revenues to profits for shareholders amid intense competition from rivals such as Facebook. In the first quarter, revenue declined on a sequential basis from $165.7 million in Q4 of 2016 to $149.7 million.
The closely watched daily active user (DAU) count rose by 7 million sequentially and 30 million annually to 173 million, falling slightly short of a 174.6 million consensus. Investors have anxious that the app maker won't be able to grow its ad business in the face of mounting competition from Facebook.
Employees will be able to publicly sell their shares for the first time next week, presenting another test of confidence in the company.
Snap CEO Evan Spiegel has long defended the company's decision not to make user growth its primary mission.
While Snapchat sends fewer notifications, it encourages daily use through Snapstreak, which calls out streaks in which two friends send each other snaps at least once for more than three consecutive days.
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Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.5 basis points at 2.228%. About 6.22 billion shares changed hands on US stock exchanges, slightly above the 6.15 billion average for the last 20 sessions.
Spiegel 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.
The dancing hot dog that Spiegel called the world's "first augmented reality superstar" was viewed more than 1.5 billion times on Snapchat, plus tons more as it was made into viral memes shared around the web. For instance, Facebook has added around 100 million new daily users on its Instagram Stories features between January and June. The pair's post-IPO lockup will expire Monday.
"Snap has vast, long-term potential as it offers an engaging platform for communication and entertainment", Aaron Goldman, CMO of media and data science firm 4C Insights, said earlier this week.
"DAUs have slowed down while rivals like Instagram have demonstrated considerable growth".
Snap Inc, formerly Snapchat, Inc, is a camera company. That growth rate is down by 0.8% from 5% growth of the previous quarter.
The young company posted a staggering $2.2 billion loss in its first earnings report in May, and added just 8 million new daily active users during the quarter. That seemed to suggest that Snap thinks it will eventually have opportunities to sell ads within the feature.