Sequentially, DAUs increased just 5% from 158 million to 166 million. Monness, Crespi, Hardt & Co predicted 173 million, according to Reuters.
Snapchat's user growth slowed to a halt in the final three months of 2016, which coincided with Instagram launching its Snapchat copycat feature.
Shares of the company plunged more than 20 percent to $18.30 in after-hours trading on Wednesday.
In addition, Snapchat is also losing twice as much money as it was this time a year ago.
A survey of more than 3,000 people in the U.S. revealed consumer confidence in SnapChat was low, with 62 percent claiming they expect a SnapChat alternative to be released to which they will switch.
In North America, Snap said it added 3 million daily users in Q1, reaching 71 million DAUs.
Not only did Snap record a $2.2 billion loss for the first quarter, but its revenue was lighter than expected and its user growth decelerated.
Today's news from Wall Street - its first-ever earnings report as a publicly traded company - was not great for Snapchat and its fearless leader Evan Spiegel. During its initial IPO earlier this year, Snap explained that its user growth was somewhat stagnant, but nevertheless, it is still pulling in new users.
Snap experienced an adjusted loss of $188.2 million, which was around $10 million higher than analysts expected it to be.
The company said it brought in $149.6 million, a 300 percent increase from a year ago, but well short of Wall Street's $158 million estimates.
Snap also reported that its users spend 30 minutes a day on average using the app and create 3 billion Snaps each day. Last quarter, the company lost $170 million.
With more user engagement, the company can attempt to convince investors that it is capable of generating more revenue per user.
Facebook also allows users to tweak photos on their smartphones with visual details like a rainbow or a beard of glitter, also similar to Snapchat.