Snapchat stemmed declines in users and beat revenue expectations

Snap, the parent of disappearing message app Snapchat, stemmed recent declines in users and beat revenue expectations in its fourth-quarter results, sending shares soaring by more than 20 per cent yesterday. Ahead of the results, the Los Angeles-based company had faced investor concern over growing competition from Facebook-owned Instagram and recent management upheaval. However, it posted a 36 per cent rise in revenues in the fourth quarter of 2018 to $390 million, exceeding analysts’ estimates of about $379 million. Net losses nearly halved compared with the same quarter the prior year, to $192 million. Snap lost several million users earlier last year in the wake of an unpopular redesign of its app, while Instagram gained popularity with its rival Stories feature. Snap said daily active users were flat in the fourth quarter at 186 million, stabilising after two consecutive quarters of declines. It also said it did not a expect a decline in users in the first quarter of 2019… Shares jumped more than 20 per cent on the results, to trade about $8.50, but still remain a long way from the issue price of $17 each in March 2017. The company said… it had begun to roll out a long-awaited update to its Android app, which has been more than a year in the making.
Hannah Murphy