In the second quarter, Snap (NYSE:SNAP) did not maintain the higher pace of user growth it enjoyed at the start of the coronavirus pandemic. As a result, the social media company fell short of its own estimates when it reported on the period after the market closed Tuesday.

Although the number of daily active users on its Snapchat app swelled by 35 million to 238 million, a 17% year-over-year increase (and 4% more than in the first quarter), that didn't quite reach management's forecast of 239 million users.

Couple taking a selfie

Image source: Getty Images.

CFO Derek Andersen told analysts on the earnings conference call that the lift Snap saw early on in the crisis "dissipated faster than we anticipated as shelter-in-place conditions persisted."

Snap's stock fell nearly 7% in after-hours trading, and analysts began downgrading the stock.

What have you done for me lately?

Revenue jumped 17% year over year to $454 million in the period, but its losses also widened to $326 million from $255 million. 

Even though Q2 marked the fourth consecutive quarter that user growth has increased by a double-digit percentage rate, analysts remain worried about the tech company's ability to monetize the Snapchat app outside of the U.S. and Europe. In addition, because the market has tended to value Snap based on its user growth rather than revenue or profits, the specter of a slowdown in that growth makes its lofty valuation harder to justify.

Moreover, Snapchat may be suffering due to the ever-increasing popularity of TikTok, the Chinese video-sharing app that has recently become a subject of data security -- and national security -- concerns. TikTok has been downloaded over 2 billion times globally, and in the first quarter was installed 315 million times, the most downloads any app has ever recorded in a single quarter, according to Tower Sensor.

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