Snapchat owner Snap says it is working to overhaul its signature messaging app, as it struggles to attract users and turn a profit.
Shares in the firm plunged after hours on Tuesday, after the firm reported losses of more than $400m (£337m) in the quarter.
It also had lower-than-expected revenue and user growth.
Snapchat said the changes would make the app easier to use and more compatible with Android phones.
However, it warned the transition could be rocky.
"We're willing to take that risk for what we believe are substantial long-term benefits to our business," said 27-year-old chief executive Evan Spiegel.
Snapchat pioneered the craze for disappearing messages among teens.
Analysis - By Dave Lee, BBC North America technology reporter, San Francisco
When you have to put out a statement denying rumours you're shutting down within a year… that's when you know things aren't going particularly well.
As well as denying it was going bust, in the past few months Snap has had to admit supplies of its Spectacles product, once the talk of the town, are piled high in warehouses.
Revenues have been harder to come by than investors had hoped as the company struggles to turn around intense advertisers' interest - these are teenagers, after all - into a system that runs seamlessly and reliable ways to measure success.
And just this week the network suffered a widespread outage.
Some of Snap's problems are self-inflicted, others are inflicted by Facebook - a company that once tried to buy Snapchat, and which now relentlessly copies its best features.
But it faces fierce competition from larger rival Facebook and Facebook's image-sharing network Instagram, which have introduced similar features.
Learning from mistakes
Snap said it had 178 million daily active users on average over the quarter, up 3% over the previous three months.
The firm told investors it made almost $208m in revenue in the quarter, up 62% year-on-year.
That represents about $1.17 in revenue per user, compared to Facebook's more than $5 in revenue per user.
But Snapchat's ad prices have fallen. The firm also reported a nearly $40m loss stemming from excess inventory of its Spectacles product, sunglasses with recording capabilities, which proved less popular than hoped.
"We're learning from it and plan on avoiding a similar mistake in the future," Mr Spiegel said.
Snapchat shares plunged more than 17% in after-hours trade, falling below $13.
That extended the losses that started soon after Snapchat became a publicly traded company in March, when shares debuted at $17.
The earnings report came less than a day after an outage on the service. Snapchat also had to address rumours it was shutting down.