Snap reported a dramatic 43% rise in revenue in its third quarter, but continued to shed users.

The company reported record revenues of $298 million, exceeding the consensus estimate of $283.21 million. That’s the most money Snap has booked in a quarter.

Snap also shrank its losses to $325 million, or about 25 cents a share. That’s a major improvement from the prior year, when it lost $443.2 million.

However, the number of daily active Snapchat users, an important metric for the messaging app, fell to 186 million, a loss of two million from the prior quarter.

“We’re investing in long-term growth opportunities and driving operational efficiencies,” said Snap CFO Tim Stone. “We achieved record revenue and strong bottom-line results this quarter and expect a record fourth quarter, as we continue to invest in innovation for our community and scale our business.”

Investors reacted cooly to the result, sending the stock down nearly 3% in after-hours trading, sagging to $6.88 a share.

Wall Street investors were bracing for the ephemeral messaging app to shed about 6 million daily active users in the quarter and report a loss, as the company faces heightened competition from Facebook-owned Instagram.