07 February, 2018
More importantly, revenue was up 72 percent year-on-year to $285.7 million, compared to the estimate of $253 million. This is the first time Snap has beat market expectations since going public a year ago. The company has demonstrated meteoric growth in users since 2014, quadrupling its user base since January 2014 from 46 million to 187 million.
"Our business really came together towards the end of previous year", Spiegel said in remarks prepared for a conference call with analysts. Shares were up 26% in after-hours trading, peaking at a high of $17.60 shortly after earnings were released, before dropping a little to $16.82.
Snap is working on redesigning its app to separate what friends share and what media organizations publish in an attempt to appeal to a broader range of users. Snap still lost $350 million in just three months, although that's an improvement compared to the $440 million it lost in the quarter before. If the gains hold, Snap's stock could open above its IPO price of $17 a share for the first time since July. The fourth quarter was an "important quarter for Snap as investor confidence in the company's growth story has waned".
Chief Executive Evan Spiegel touted the results, saying revenues were up over the same time a year ago - and Snap gained 8.9 million users in the quarter, its biggest quarterly growth since the third quarter of 2016.
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Analysts and investors have been watching to see if Snap can boost user growth amid competition from larger rival Instagram, which has added photo filters and other Snapchat-like features.
Spiegel said Tuesday that Snap had generated more than $100 million for its content partners in 2017.
"We executed well on our 2017 plan to improve quality, performance, and automation, which removed friction from our advertising business and improved our application for the Snapchat community", he said.
It will also move many of its headquarters employees to leased facilities in Santa Monica, California, during the first half of the year, Vollero said.