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tiptrot.com April 19, 2018


Snap shares soar over 20% following solid revenue and user growth

07 February 2018, 01:17 | Gerardo Harmon

Michael Loccisano Getty Images Evan Spiegel

Michael Loccisano  Getty Images
Evan Spiegel

More importantly, revenue was up 72 percent year-on-year to $285.7 million, compared to the estimate of $253 million. CEO Evan Spiegel said in a conference call Tuesday that the company is "pleased with the initial results" and the redesign will be available to all Snapchat users in the first quarter.

Almost a year after its initial public offering and lackluster growth, the company behind Snapchat is making a comeback.

"Our business really came together towards the end of previous year and I am very proud of our team for working hard to deliver these results", said Snapchat CEO Evan Spiegel in prepared remarks to Tuesday's earnings call.

Snap's good news extended to usage metrics, with Snapchat adding 8.9 million daily active users in Q4 - the highest net addition since Q3 of 2016.

Snap's stock jumped 19 percent to $16.74 in after-hours trading on Tuesday.


After struggling to grow its audience throughout the year, Snap unveiled a significant redesign in November meant to make its messaging service more intuitive to users.

To make its app more friendly with users and advertisers, Snap launched a redesigned app in November, splitting "friends" from content feeds. Money made off those ads is usually split - Snap keeps some and pays some back to the media companies who provide the content. Earlier, they rose 1.5 percent to close at $14.06 in NY.

The improved margin "shows that they can control costs of user acquisition and of providing service, and that should eventually lead to the leverage necessary to become profitable", analyst Michael Pachter of Wedbush Securities said.

Spiegel said a transition of Snap's ad business to an auction model helped boost revenue. "We ended 2017 confident that we can grow our Snapchat community and monetize our products more efficiently than ever before".

The company expects its year-over-year revenue growth rate to moderate in the current quarter compared with the fourth quarter, Chief Financial Officer Drew Vollero said.



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