Snap Inc.'s Share Price Soars After Revenue Beats Expectations

Snap Inc.'s Share Price Soars After Revenue Beats Expectations

Snap Inc.'s Share Price Soars After Revenue Beats Expectations

Snap, which makes the Snapchat photo-messaging app, said fourth-quarter sales jumped 72 percent to $285.7 million, beating the $252.8 million average projection of analysts, according to data compiled by Bloomberg.

In its first quarterly report as a public company in March, Snap recognized $2 billion of stock-based compensation, including $636.6 million for awards to CEO Evan Spiegel.

Almost a year after its initial public offering and lackluster growth, the company behind Snapchat is making a comeback.

The Venice, California-based company posted a net loss of $350 million, or 28 cents per share, down from a loss of $170 million, or 20 cents per share, a year earlier.

Snapchat's daily active users rose to 187 million in the quarter 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.

To make its app more friendly with users and advertisers, Snap launched a redesigned app in November, splitting "friends" from content feeds.

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Snap shares lifted 23 per cent in after-hours trade to US$17.26 following the fourth quarter update for the company known for its ephemeral smartphone messages and other online content.

After struggling to grow its audience throughout the year, Snap unveiled a significant redesign in November meant to make its messaging service more intuitive to users.

Snapchat has finally made investor concerns disappear. Revenue per user rose 46 percent from a year earlier to $1.53, while cost of revenue per user rose 5 percent to $1.02.

Shares of Snap, the parent company of teen app darling Snapchat, skyrocketed following some rare good news for the company. The average estimate of 10 analysts surveyed by Zacks Investment Research was for a loss of 15 cents per share.

Spiegel said Tuesday that Snap had generated more than $100 million for its content partners in 2017.

"We ended 2017 confident that we can grow our Snapchat community and monetize our products more efficiently than ever before", Spiegel said.

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