Snap Shares Surge On The Back Of Growth In Users And Revenue

Snap Shares Surge On The Back Of Growth In Users And Revenue

Snap Shares Surge On The Back Of Growth In Users And Revenue

Paired with higher-than-expected revenue and improved margins, the user growth signalled loss-making Snap could be turning a corner as it grapples with other social media companies adding Snapchat-like features, analysts said.

On the earnings call, CEO and founder Evan Spiegel said that about 40 million users have received the redesign so far.

Snap crushed Wall Street's revenue targets in its fourth quarter, as it filled its Snapchat app with more ads than ever and tapped into a broader group of consumers that use Android phones.

Snap seems to have reversed the pattern of falling user growth seen in previous quarters, with 187m active users on Snapchat reported in Q4 - 18pc higher than the same period for past year.

"Our work during 2017 is proof that we aren't afraid to make big changes for the long-term success of our business", Spiegel said in his prepared remarks.

Along with some subtle stylistic tweaks, the biggest changes include the removal of the app's Stories page and a clear line between personal communications and media. More than 90 per cent of Snap ads are now bought through the "programmatic" system, suggesting the worst of the transition is behind it. User-allotted revenue in the rest of the world experienced a significant rise factoring in 23% of total revenues against this time last year's just 12%.

DAUs: 187 million, up 5% from Q3. However, in the call to investors on Tuesday, Snap warned that brand spending, which often peaks at the end of the year, could fall again in Q1 and lead to lower revenue to kick off 2018.

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Analysts were expecting revenue of US$253.2mln and daily active users of 184.2 million.

"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 center". Earlier this month, Snapchat launched an in-app Snap Store, where users can purchase merchandise such as the $20 Dancing Hot Dog Plushie.

Additionally, "Costs were high, as generally expected, but not quite as high as we forecast for this quarter". Ad impressions jumped over four times while price per impression fell 25%. Snapchat's DAU increased by 18% over the year when compared to 2016.

Some users are actually angry at the new design, with many asking how they can go back to the old version of the app, Metro reports.

"Our business really came together toward the end of a year ago", Snap CEO Evan Spiegel said on a conference call with analysts Tuesday, according to CNN. The company has made it easier and cheaper for advertisers to buy ads, which it hopes will help with revenue. The business had revenue of $207.90 million for the quarter, compared to analysts' expectations of $236.71 million.

The parent company for the ephemeral-messaging app Snapchat announced its fourth-quarter earnings today (Feb. 6).

This post originally appeared on Business Insider.

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