Snap is probably hoping its first-quarter earnings report will disappear as quickly as the average Snapchat does. The company posted a big loss on softer-than-forecast revenue, sending the shares down by about 23% in after-hours trading. The tumble brought the stock to $17.55 at the time of publishing, leaving it barely above its $17 IPO price from March.

Ahead of its first earnings report as a public company, questions swirled as to how Snap will compete with Facebook and others in the mobile-advertising market. In roughly eight months, Facebook-owned Instagram was able to amass more users for a section of its app that’s a near carbon copy of Snapchat Stories, where users can post short videos and photos of their day that disappear after 24 hours. Facebook has since rolled out a similar function to pretty much every app it owns, with varying degrees of success.

Some have argued that Snapchat can succeed in spite of Facebook’s dominance, given that its youthful user base checks the app so often—18 times a day, according to the company’s IPO filing. Presumably they will continue to do so, as long as their parents don’t show up on the app.

But the questions have remained: Can Snap cut its losses, grow its advertising revenue, and maybe find some new users at the same time?

And it doesn’t seem, so far, that Snap has been able to. The company reported a loss of $2.2 billion, and revenue of $149.6 million for the quarter, up nearly 300% over the same period last year. Wall Street had been expecting closer to $158 million.

Snapchat’s user base is growing, slowly

Snap reports that there are now an average of 166 million users who open the app every day, up by 8 million, or about 5%, from the 158 million it reported as having in the quarter ended Dec. 31, 2016.

While Snap’s user base is smaller than the roughly 200 million users Instagram has on its Stories section (and the 400 million users it has overall), the company is at least still growing, if marginally, and theoretically finding new users to show advertisements to.

Founder and CEO Evan Spiegel has been characteristically quiet since Snap’s IPO, giving out few interviews and saying little publicly. There was some speculation as to whether Spiegel would miss today’s call and leave it to his deputies. But he was present, and he wanted people to believe that Snap has made peace with its biggest threat, Facebook, aggressively copying its ideas. “We believe everyone is going to develop a camera strategy,” Spiegel said. “At the end of the day, just because Yahoo, for example, has a search box, doesn’t mean they’re Google.”

It was a solid burn, but the numbers show the challenge Snap is now up against.

User growth

Instagram: 100M MAU in past 4 months
Twitter: 9M MAU in past 3 months
Snapchat: 8M DAU in past 3 months

— Neil Cybart (@neilcybart) May 10, 2017

North America is Snap’s bread and butter

In its IPO filings, Snap reported that it generated an average of $2.15 from each user in North America, but just $1.05 on average for its global user base. In the most recent quarter, the North American audience logged an average of $1.81 per user. The global user base raked in $0.90 apiece, up over 180% from the same period in 2016, but down 14% over the previous quarter.

Total revenue of $150 million was up a whopping 284% from $39 million a year prior, but down from $166 million in the previous quarter. Imran Khan, Snap’s chief strategist, said he was “pleased with international growth,” citing that 14% of revenue came from international markets this quarter, up from 7% a year ago.

Snapchat has acknowledged that developing markets with relatively unaffordable and spotty data and low-quality handsets aren’t ready to fully utilize its real-time product yet. But Snap hasn’t given up on the rest of the world yet. Said Spiegel, “We are making some larger structural changes that I think make a big difference on Android over time.” Probably a good call since Android devices make up nearly nine in ten phones in the world.

Snapchat team must clearly believe they have exhausted their user growth on iOS.

— Ben Bajarin (@BenBajarin) May 10, 2017

It still generates far less revenue than it costs to run the company

Snap signed a $2 billion deal with Google Cloud right before its IPO so that Google could run the data storage and processing of all the billions of snaps that are sent every day. The company also has a $1 billion deal with Amazon Web Services. Snap revealed in its public filings that server and other data-management fees cost the company more than it generates in revenue from selling advertisements against those snaps. It also spent $805 million on research and development. (In contrast, the highly profitable tech giant Apple spends under $3 billion on R&D.)

Snap’s total costs for the quarter were over $2.3 billion. (Part of the sky-high expenses can be attributed to stock-based compensation tied to its public debut.) If Snap is going to succeed in the long term, it will need to either figure out a way to lower its cloud-computing costs, or significantly increase its advertising revenue.

Spectacles exists, too

When the company announced it was reforming as Snap, with Snapchat as one of its subsidiaries, it also announced the launch of Spectacles, a line of Bluetooth-enabled sunglasses that allow users to take short, immersive videos and upload them to Snapchat. The company said in its IPO filing that the glasses had not “generated significant revenue for us.”

The company did not breakdown Spectacles sales for the most recent quarter, but it did note an uptick in the “other” section, which includes Spectacles, from $4.5 million in the last quarter of 2016 to $8 million in the first quarter of 2017. Over 5 million snaps have been created by Spectacles till date, the company said.

~$8m in revenue from Spectacles in Q1, Suggests ~60k sales

— Jan Dawson (@jandawson) May 10, 2017

Snap didn’t release how many Spectacles it had sold, nor did it give much indication as to whether investors would be seeing any new hardware from the company. There have been rumors that the company could be working on a drone or a 360-degree camera. But Snap did warn Wall Street in its IPO filing: “We have limited manufacturing experience.”

So perhaps Wall Street will show patience there. But it’s not being very forgiving otherwise.