Snap Shares Surge On The Back Of Growth In Users And Revenue
- Author: Anthony Vega Feb 09, 2018,
Feb 09, 2018, 3:25
But he said more needed to be done, in particular making sure the company maintains the quality and relevance of its content, especially as it aims to catch up to Facebook Inc.'s juggernaut Instagram.
Snapchat's daily active users rose to 187 million in the quarter that ended December 31 from 178 million in the third quarter, beating analysts' average expectation of 184.2 million users, according to financial data and analytics firm FactSet. Snapchat's user growth was better than a 5 percent jump quarter-over-quarter - only three months removed from posting a 2.9 percent growth rate.
While Snapchat has always been considered popular among younger users, the service must prove it can also appeal to users in older demographics in order to drive further growth and appease advertisers looking to reach users with more spending power.
"Our business really came together towards the end of a year ago and I am very proud of our team for working hard to deliver these results", Snap cofounder and CEO Evan Spiegel said on a conference call with investors on Tuesday.
Its shares had fallen by half from the US$29.44 high reached after the IPO and have not traded above the US$17 IPO price since July 10.
Snapchat faces stiff competition from Instagram, which has more than twice the daily users of Snapchat and threatened to stamp out Snapchat by copying features such as photo filters and disappearing slide shows.
"For the first time, revenue in Q4 from advertisers outside of Ad Age's Top 100 exceeded revenue from the Top 100 Advertisers", Imran Khan, Snap's chief strategy officer, said during the conference call.
Snap has been constantly tweaking its service, redesigning and adding new features, aiming to improve the overall experience for existing users and make it more appealing to new customers. This exceeded the $252.9 million that was expected by analysts polled by Yahoo Finance, according to Forbes.
Snap CEO Evan Spiegel pointed to his willingness to change the company and the product.
Excluding items, Snap reported a loss of 13 cents.
The company reported a loss of $350 million dollars or -$0.28 per share.
After a disappointing third quarter, Snap leadership made a decision to reconfigure its Snapchat application in an effort to raise ad revenue and boost its Daily Active User (DAU) tally. The company posted average revenue per user was up 46% year-over-year.
"They are in the process of building credibility with Wall Street", said Rich Greenfield, an analyst at BTIG.
While you will no longer receive notifications from that conversation, you'll still be able to access it, check any unread messages and Snaps and send your own too. Progress in the Snap ad auction platform was a key area of focus among analysts.
One analyst said the two apps would continue to compete and Snap was doing well competing for available revenue.