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Snapback for Snap on upside revenue surprise

2017-03-02T010039Z_12354575_RC1865E58200_RTRMADP_3_SNAP-IPO.jpg
Snapchat parent company Snap Inc saw a big snapback in shares Tuesday as the youth-oriented social network reported stronger-than-expected revenue growth.

[SAN FRANCISCO] Snapchat parent company Snap Inc saw a big snapback in shares Tuesday as the youth-oriented social network reported stronger-than-expected revenue growth.

Snap shares lifted 23 per cent in after-hours trade to US$17.26 following the fourth quarter update for the company known for its ephemeral smartphone messages and other online content.

The company reported its loss widened to US$350 million in the last three months of 2017 after a US$170 million deficit a year earlier.

But revenues were better than expected, jumping 72 per cent year-on-year to US$286 million.

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The number of daily active users of the Snapchat application rose to 187 million, a gain of 8.9 million in the quarter and up 18 per cent from a year earlier.

Snap said the average revenue per user rose 46 per cent from a year ago to US$1.53, offering some hope for reaching profitability.

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.

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

Snap has sought to boost engagement by offering new kinds of content, including snippets from sporting events and media partners.

NBCUniversal and Snap Inc last year announced a joint venture to produce original scripted shows for Snapchat.

AFP

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