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Snapchat parent Snap lifted by quarterly update
[SAN FRANCISCO] Snap shares surged on Tuesday after it reported rising revenue, narrowing losses and a stable number of people using its Snapchat smartphone image-themed social network.
The Southern California-based company said it lost US$192 million on revenue of US$390 million in the final three months of last year, compared with a loss of US$350 million on revenue of US$286 million in the same period a year earlier.
"We ended the year with user engagement stabilizing and have started rolling out the new version of our Android application to a small percentage of our community," chief executive Evan Spiegel said.
"We are substantially closer to achieving profitability, as we have maintained a relatively flat cost structure across the past five quarters while growing full-year revenue."
Initially known for its disappearing messages, Snapchat has been ramping up new kinds of video content with a focus on reaching young smartphone users.
Snap shares jumped more than 17 per cent to US$8.25 in after-market trades that followed release of the earnings figures.
"The fact that Snap was able to maintain its daily active user base quarter over quarter is a positive sign," said eMarketer principal analyst Debra Aho Williamson.
"When Snap finally rolls out its updated Android app it could move the company back into growth territory."
She noted that Snap revenue gains were "fairly strong," matching eMarketer expectations.
Snap said that even though its user base has been little changed it is connecting more with users, especially youth.
It said its premium mobile ads reached 70 per cent of the 13- to 34-year-old US and that more people are watching its new video content.