Snap Share Prices Skyrocket Following App Redesign

09 February, 2018, 05:24 | Author: Salvatore Jensen
  • Michael Loccisano  Getty Images
Evan Spiegel

"With our plans for user growth, augmented reality, and content in 2018, I have never been more excited about the future of our business".

Snapchat now has 187 million daily active users, which is higher than 184.2 million expected from analysts.

"Management is effectively entrenched, and shareholders are entirely disenfranchised because Snap's publicly traded shares lack any voting rights", he added.

"Our business really came together toward the end of a year ago", Evan Spiegel, the cofounder and CEO of Snap, said on a conference call with analysts Tuesday.

However fast Snap is growing, it still has the world to conquer. To that end, Snapchat has been teasing a redesign of its mobile app aimed at attracting older users by making it easier to use. Chief Executive Evan Spiegel did not announce a release date Tuesday, though he did say the new version was now in the hands of about 40 million people and should roll out this quarter.

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. DAUs for all of 2017 rose 18% from a year earlier, reversing a trend of slow growth for the social media platform.

Instagram, which has over twice the number of daily users that Snapchat has and is backed by Facebook and its huge amounts of cash, has been a threat to crush its rival through copying its features like disappearing slide shows and photo filters.




Snapchat is banking on smaller businesses to advertise on its platform as ad revenue has almost doubled in that market. He has also developed tools to monitor brands' early adoption of live-streaming apps, compare Yahoo's and Google's search designs and examine the NFL's YouTube and Facebook video strategies.

Spiegel said 90 percent of Snap ad revenues now come from its automated platforms, and said this system is likely to help boost growth. Analysts had been expecting a loss of around $409 million, on about $255 million in revenue. Snap lost $443 million last quarter, nearly the same amount it lost in Q2 and up considerably from the $124 million it lost in Q3 the year prior.

To the surprise of investors, Snap reported that both its user growth and revenue growth are accelerating.

Overall, Snap has far fewer users than Facebook, but its growth is faster and more constant especially in North America. Stocks of Snap Inc. went up 25 percent to around $17.60 per share, which was more than its IPO price.

According to TechCrunch, Snapchat said: "Updates as big as this one can take a little getting used to, but we hope the community will enjoy it once they settle in". A drop in quality takes users' attention elsewhere and Snapchat is now facing that challenge.

A Kantar TNS study from September 2016 found that Snapchat use in the U.A.E. sat at 53%, up from 28% in 2015. It could also be a great opportunity for marketers to reach and engage their audiences with well-targeted promoted content, while positively impacting Snapchat's bottom line.

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