Snap Inc. has a growth problem, which may make it hard to attract a larger share of retailers’ ad dollars. The social network only added 7 million daily active users between the first and second quarter, the company reported Thursday.

Snap, the parent company of Snapchat, now has 173 million daily active users, up 21.0% from 143 million a year earlier.  In the U.S. and Canada, it had 75 million daily active users, up from 71 million in the previous quarter. That means Snapchat is roughly half the size of Twitter Inc., which has 328 million monthly active users.
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On the bright side, Snap is getting better at monetizing its user base. The social network generated $1.05 of revenue per user, on average, during the quarter.  That’s up 110.0% from 50 cents a year earlier. And it generated $1.97 of revenue per U.S. user, on average, up 85.8% from $1.06 a year earlier.

“Adoption of our ad platform is increasing with more than half of our all Snap ad impressions delivered through our self-service platform and our API this quarter,” said CEO Evan Spiegel, on a conference call with analysts. “As our automated capabilities improve, we are running more campaigns from more advertisers resulting in a greater variety of ads on our platform. This enables us to build a robust auction and drive more relevant ads using better results for our advertisers and a better experience for our community. Additionally, this auction allows advertisers to optimize their campaigns across our inventory to achieve their specific objectives further increasing ROI.”

Imran Khan, Snap’s chief strategy officer, emphasized the platform’s strength in the U.S. and Canada, “two of the most monetizable markets in the world,” he said. “Together these two countries represent half of all global mobile advertising spent, our traction in core markets like the U.S. and Canada puts us in a great position as we would scale our monetization by allowing our advertisers to leverage our platforms to reach. For example, an advertiser wanting to reach 13 to 34-year-olds in the U.S. would access our publicly available ad manager tool and reach 75% of the total U.S. population in that age group over the course of a multi-week campaign.”

For the second quarter ended June 30, Snap reported:

• $181.7 million in revenue, up 153.1% from $71.8 million a year earlier.
• 173 million daily active users, up 21.0% from 143 million.
• $443.1 million net loss compared with a $115.9 million loss.

For the first half of the year, Snap reported:

• $331.3 million in revenue, up 199.5% from $110.6 million a year earlier.
• $2.265 billion net loss compared with a $220.5 million loss. That large loss was due, in large part, to $1.992 billion in stock-based compensation expenses in the first quarter.