It looks like the cloud of doom-and-gloom hanging over Snapchat parent company Snap Inc. may be in the early stages of receding, as the company today posted its first ever better-than-expected quarterly earnings since going public in spring of past year. The net loss was $350 million in the fourth quarter, for a full-year loss of $3.45 billion. The Company offers three ways for people to make Snaps: the Snapchat application, Publishers Tools that help its partners to create Publisher Stories, and Spectacles, its sunglasses that make Snaps. Snapchat users must know the feeling, since the update itself was released a few weeks ago without any word from the company, as reported by TechCrunch's Josh Constine.
"We continue to view Snap's audience and platform as a unique asset in the digital-media space with a long monetization runway", said John Egbert, an analyst at Stifel Nicolaus, in a note to investors before the results. But according to its fourth quarter earnings report, the company has finally managed to add new daily active users (DAU) at a record high rate of 5 percent, which represents "the highest net adds since Q3 2016".
Facebook and Instagram may have successfully borrowed a lot of Snap's designs, but it still has a few tricks up its sleeves.
"Our business really came together towards the end of past year", said Evan Spiegel, Snap's CEO, in a statement.
Analysts had expected losses of $409 million, and revenue of around $253 million. The company's revenue for the quarter was up 62.2% on a year-over-year basis.
During Snap's third quarter earnings call, co-founder and CEO Spiegel acknowledged that Snapchat is harder to understand than he initially realized.
Average revenue per user, a closely watched number, rose 46 percent to $1.53 in the final period of 2017, while a similar measure of costs grew much more slowly, according to the company.
Advertising revenue rose 74 percent to $281 million, as companies advertised more in the key holiday quarter.