Snap Revenue Surges 72% on User Growth, Advertising Gains

07 February, 2018, 01:48 | Author: Salvatore Jensen
  • NATION-NOW     Snapchat's parent finally sees a turnaround     
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After a trio of clunkers over the past year, Snap Inc. finally turned in an impressive quarterly earnings report Tuesday, beating expectations for revenue and user growth for the first time as a public company. The company's stock chart Tuesday afternoon looked similar to the trajectory of Elon Musk's SpaceX rocket, launched into outer space just minutes before Snap reported - straight up. In the year-ago quarter, Snap Inc (SNAP)'s revenue $165.7 million.

The company has also suffered from unfavorable comparisons to Facebook Inc.'s Instagram, which is rapidly expanding and aggressively copying Snapchat's most-popular features.

Snap posted losses of $0.13 per share on $285.7 million in revenue versus expectations of a $0.16 per share loss on $252.95 million in revenue. Bank of America cut their price objective on shares of Snap from $17.00 to $16.00 and set a "neutral" rating for the company in a research report on Wednesday, November 8th.

Snap shares have tumbled since a keenly anticipated public offering in March 2017 at $24, on concerns that it may not be able to keep pace with rivals like Facebook in the fast-evolving world of social media.




SEE ALSO: Snapchat opens Snap Store in app.

Chief executive Evan Spiegel said Snap had executed its 2017 plan to improve quality, performance and automation well. In the new version, users' Discover Stories and friends' stories will reportedly be separated, which means there will be fewer chances for curious users to click on publishers' content, which could further hurt Snap's advertising efforts. Its growth over the three months of the third quarter was 2.9%. 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 and I am very proud of our team for working hard to deliver these results", said Snapchat CEO Evan Spiegel in prepared remarks to Tuesday's earnings call. Some of those costs are due to expensive cloud services deals with Google and Amazon that once signaled that Snap was bracing for an explosion of user growth.

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