Snapchat stock soars 25% after ending losing streak

The company reported its loss widened to US$350 million in the last three months of 2017 after a US$170 million deficit a year earlier.

At the company's last earnings call, CEO Evan Spiegel admitted that user growth had been slower than he would have liked.

Shares of Snap, the parent company of teen app darling Snapchat, skyrocketed following some rare good news for the company. Wall Street, however, is looking for the company to report revenue of $253 million, up 52% from Q4 2016.

According to eMarketer, Snap has seen some ad progress, but it's share of the market is tiny. Snap has invested heavily in driving its ad business forward, buying a company that helps measure in-store foot traffic, and adding ad-serving tools for its clients. The retention rate of new Snapchat users on Android increased by almost 20 percent compared to the year prior, according to prepared remarks.

"Our business really came together towards the end of previous year", Chief Executive Officer Evan Spiegel said in a statement. It's a significant boost in users since the third quarter of 2017, when Snapchat added just 4.5 million DAUs. That would also put Snap's yearly sales at $793 million, nearly double the $404 million it brought in in 2016.

Analysts are expecting an increase of between 6 million and 7 million users for the quarter being reported today. A fresh design followed, and since then we've also heard that Stories will soon be available on the web. In the new version, users' Discover Stories and friends' stories will reportedly be separated, which means there will be fewer chances for curious users to click on publishers' content, which could further hurt Snap's advertising efforts. This tool may also encourage Snapchat users to check the app more often, especially if you don't know how many direct messages you really have.

As Evan Spiegel prepares to launch a redesigned Snapchat meant to draw new users and boost growth, the app's parent company reported its best quarter yet since its public debut. Adjusted EBITDA was a loss of $158.9 million, compared to the adjusted EBITDA loss of $152.3 million in the year-ago quarter.

  • Latoya Cobb