Snap stock soars on first ever better-than-expected earnings

Kelley Robertson
February 7, 2018

Even though the quarterly report provided a lift to Snap's stock, to the tune of more than 20 percent in after-hours trading, the company still operates for a loss and has yet to turn a profit, depsite the revenue bump. It added 8.9 million daily active users in the final three months of the year, more than any other quarter of the year.

For the year, the company reported a loss of $3.45 billion, or $2.95 per share, with total revenue of $824.9 million. The poor report included slowing user growth and a revenue miss, and showed no clear path to profitability. That indicates that Snap CEO Evan Spiegel's redesign of the Snapchat app, unveiled back in November and still in the progress of rolling out worldwide, may be helping the company reclaim some of its early-stage popularity surges that were damaged, in part, by Facebook's launch of Instagram Stories.

Snap shares are up about 23% this year. Snap has invested heavily in driving its ad business forward, buying a company that helps measure in-store foot traffic, and adding ad-serving tools for its clients.

"Our business really came together towards the end of previous year", Spiegel said in remarks prepared for a conference call with analysts. While that's a significant jump from last year's $404 million, it's still a far cry from the $1 billion in annual revenue that some analysts were predicting when the company was hyping its IPO last March.

Snap's revenue was $285.7 million for the period, also beating Street forecasts. Sales for the year as a whole doubled to $825 million.


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

However, three months later, that redesign has still not rolled out widely, and investors will be looking for answers as to what's taking so long.

Although Snapchat is best known for its smartphone messaging, it has also developed partnerships with media outlets eager to reach its audience with news, video and other content.

Average revenue per user grew 46% year over year to $1.53, which is much better than the $1.36 per user that had been estimated prior to the Snap Inc (SNAP) earnings release. Its net loss was about $350 million for the quarter ended December 31.

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER