NEW YORK (AP) — Nearly a year after its initial public offering and lackluster growth, the company behind Snapchat is making a comeback.
Shares of Snap Inc. are up sharply in extended trading following stronger-than-expected revenue and solid user growth for the company’s fourth quarter.
Snap, known for its disappearing photo and video messaging app, posted a 72 percent revenue increase in the final three months of 2017, to $285.7 million. It also had a larger net loss, totaling $350 million compared with $169.9 million a year earlier. That’s largely due to stock compensation expenses related to its IPO in March 2017.
Snapchat’s daily active users grew by 5 percent from the previous quarter to 187 million. This represented the highest daily net user additions since the third quarter of 2016. This increase seemed to calm investor fears that Snapchat is a mere has-been destined to get trampled by Facebook, which has copied some of Snapchat’s most important features.
On a per-share basis, the Venice, California-based company said it had a loss of 28 cents. Losses, adjusted for one-time gains and costs, were 13 cents per share.
The results surpassed Wall Street expectations. The average estimate of 10 analysts surveyed by Zacks Investment Research was for a loss of 15 cents per share.
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. CEO Evan Spiegel said in a conference call Tuesday that the company is “pleased with the initial results” and the redesign will be available to all Snapchat users in the first quarter.
Snap’s stock jumped 19 percent to $16.74 in after-hours trading on Tuesday. The stock had closed at $14.06 in regular trading.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on SNAP at https://www.zacks.com/ap/SNAP
Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.