CEO Evan Spiegel didn't waver in addressing competition last quarter, telling analysts in a conference call: "People are going to copy your product if you build great stuff. ... Just because Yahoo has a search box doesn't make it Google."
Spiegel has tried to focus investors on the app's daily engagement, with young users opening the app more than 10 times a day and spending 20 minutes or more. But multiple agencies have told CNBC that interest in Snapchat among advertisers is flat to declining as many influencers and creative agencies look to Facebook's Instagram.
Instagram has recently added the disappearing images that Snapchat is known for, as well as animated face mask effects. Facebook CEO Mark Zuckerberg has signaled serious intent to overtake Snapchat in augmented reality as well.
Google, to a lesser extent, could also prove a rival to Snap, given its dominance in digital search advertising. Google's mobile app now features a feed that mimics Facebook's social network. Google is also in talks to create a quick-loading media platform similar to Snapchat's Discover, according to The Wall Street Journal.
Google's Android platform has already proven troublesome for Snapchat. During Snap's pre-IPO roadshow, Spiegel attributed slowing user growth to challenges from Android's low-end devices.
With most of its customers on iPhones (at least as of earlier this year), Snap is also beholden to Apple. Although Apple does not make money from advertising, the company's upcoming software updates signal that it has bold ambitions for augmented reality in the next iPhone. It's possible new features might have the potential to distract users from Snap's hallmark Lenses, which impose shape-shifting filters, like puppies or glasses, over faces and objects.
Nonetheless, some in the industry remain optimistic about Snap's competitive position.
Martin Sorrell, CEO of advertising giant WPP, told CNBC's "Squawk Box" this month that his company plans to double its spending on Snap this year.
— CNBC's Michelle Castillo, Berkeley Lovelace, Thomas Franck and John Shinal contributed to this report.
Disclosure: CNBC parent NBCUniversal is an investor in Snap.