Snap shares soar as user growth, revenue beat

Snap shares soar as user growth, revenue beat

Instagram, which has over twice the number of daily users that Snapchat has and is backed by Facebook and its huge amounts of cash, has been a threat to crush its rival through copying its features like disappearing slide shows and photo filters. The business's revenue was up 62.2% on a year-over-year basis. equities analysts anticipate that Snap will post -3.03 earnings per share for the current year.

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.

The main reason given by the company for the stellar revenue numbers was the fact that daily active users have risen dramatically since the previous quarter. This isn't the only feature that's made a silent debut, as users will also find that they now have more options when it comes to adding text to their snaps.

"The retention rate of new Android users increased by almost 20% when compared to a year ago, meaning that the people who try Snapchat on Android are much more likely to stick around and become Daily Active Users".

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"While it was critical to build our team to keep pace with the growth of our business, it has become clear that we can now unlock substantially more productivity simply by changing the way that we work and by continuing to build an inclusive and creative culture", Spiegel said.

Shares traded at $17.09 after the bell, up 22 percent, and had traded even higher. Shares then went up to a high of $29.44 that week, but decreased below its IPO price over the summer.

"This was a monster quarter relative to bearish expectations", analyst Daniel Ives of GBH Insights said, cautioning however that "competitive headwinds abound with Instagram front and centre". Ever since the company behind Snapchat publicly unveiled paperwork with plans for a $20 billion IPO nearly exactly a year ago, concerns have surfaced about Snap's long-term viability.

The company plans to lure in more users by redesigning Snapchat to make it easier to use and fixing software bugs.

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The company reported its loss widened to $350 million in the last three months of 2017 after a $170 million deficit a year earlier. It was Snap's fourth quarterly earnings as a public company.

Excluding items, the loss came to 13 cents a year, exceeding analysts' estimates of 16 cents per share. Based on the social media rants that many users have been posting, however, there are a lot of them that are not willing to give it a chance.

Spiegel said a transition of Snap's ad business to an auction model helped boost revenue.

Investors will also be pleased to learn that worldwide the revenue created by each user has risen to $1.53 (£1.10) per quarter, compared with 90 cents at the start of 2017.

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