Snap (SNAP) shares were up over 11% in after-hours trading on Tuesday after the social-media company beat earnings estimates but disappointed on user growth.

The Venice, California-based tech company announced less of a loss than Wall Street analysts predicted: $.14 per share on revenues of $262 million compared with analysts’ expectations of $.17 per share on revenues of $251 million. However for the first time ever, Snap reported a sequential decline in daily active users, dropping from 191 million DAUs in the first quarter to 188 million DAUs in the second quarter — a stark contrast from analysts, who had estimated a gain of nearly 2 million users.

“Although we saw our monthly active users increase, our daily active users declined by 2%,” Snap CEO Evan Spiegel said on the earnings call on Tuesday, attributing the dip to a “slightly lower frequency of use” due to a controversial redesign rolled out late last year.

During the company’s second quarter, Snap introduced a redesigned Snapchat app aimed at addressing criticisms lobbed at a more radical app update rolled out late last year that separated the app into two distinct feeds. The company also introduced a new version of its Spectacles camera glasses in its ongoing effort to expand beyond the smartphone.

Given Snap’s lackluster performance since the company went public in March 2017, a significant number of Wall Street analysts remain bearish: Snap currently has 6 buys, 18 holds and 11 sell ratings from analysts.

Snap hasn’t had an easy path since Snapchat launched in 2011. Although the ephemeral messaging app quickly gained popularity in earlier years among teens and millennials seeking a more private, hipper alternative to Facebook (FB), the company has had trouble consistently delivering significant user and revenues growth to investors since it debuted as a publicly-traded company. Chalk much of those challenges up to Facebook’s cribbing of Snapchat Stories, last November’s maligned app update and the initial disappointing launch of Spectacles.

Along with Snap’s mixed results on Tuesday, however, came some positive news for the company in the form of a $250 million investment from Prince Alwaleed Bin Talal Abdulaziz AlSaud, a member of Saudi Arabia’s royal family, in exchange for a 2.3% stake in Snap.

—

JP Mangalindan is the Chief Tech Correspondent for Yahoo Finance covering the intersection of tech and business. Email story tips and musings to [email protected]. Follow him on Twitter or Facebook.

More from JP:

• Pandora CEO: ‘We’re in the early innings of turning things around’

• Facebook woes ‘deeper than a 1-day sell-off’

• Facebook user number disappoint and revenue guidance disappoint, stock collapses