Snap shakes off recent struggles, stock jumps after earnings report

The company said daily active users of its photo-messaging app in the fourth quarter remained unchanged at 186 million from the previous quarter.
Image: Evan Spiegel arriving at the Time 100 gala in 2014.
Honoree and co founder of Snapchat Evan Spiegel arrives at the Time 100 gala celebrating the magazine's naming of the 100 most influential people in the world for the past year in April 29, 2014 in New York.Lucas Jackson / Reuters file

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By Reuters

Shares in Snapchat's parent company jumped more than 16 percent just after the company announced quarterly earnings on Tuesday that bested analyst expectations.

Snap said the number of people using its Snapchat app was flat, beating Wall Street projections that the company would continue to lose users to Facebook-owned rival Instagram.

The company said daily active users of its photo-messaging app in the fourth quarter remained unchanged at 186 million from the previous quarter, and down 1 million from the same period a year ago.

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That beat analysts' average expectation of 184.91 million, according to Refinitiv data.

"We do not foresee a sequential decline in daily active users in Q1 2019," said Lara Sweet, Snap's interim chief financial officer, in prepared remarks. She gave no specific outlook on user numbers.

Snap's stock price jumped sharply in after-hours trading but still trades well below the price set during its initial public offering. While Snap has flown under the public's radar compared to the scandals endured by Facebook, Snap has struggled with a series of executive departures, including a chief financial officer who left after only eight months with the company.

Snap's revenue, which it earns from selling advertising on the app, increased 36 percent to $389.8 million, beating Wall Street's average estimate of $377.52 million.

Average revenue per user was $2.09 during the fourth quarter, up from $1.53 in the year-ago quarter.

The company's net loss narrowed to $191.67 million, or 14 cents per share, compared with $349.98 million, or 28 cents per share, a year earlier.

Snap has launched more video content with the aim of keeping hold of its users.

For the first quarter, Snap said it expects revenue of $285 million to $310 million. That compares with the average analyst estimate for revenue of $307 million, according to data from IBES Refinitiv.