Snap Stated the number of people using its Snapchat app would Stay at Present levels this past Quarter, easing worries the company would continue to Drop users to rival Facebook’s Instagram and sending its shares up over 20 percent.
The photo-messaging app, known for its disappearing filters and messages which turn people into puppies or even tacos, has fought since going public in March 2017, since Instagram has replicated several of its novel features. A contentious redesign also alienated some of Snapchat’s users and advertisers.
In the fourth quarter Breeze topped Wall Street with 186 million each day busy consumers, flat with the previous quarter and down 1 million from the exact same period one year ago. Analysts’ average expectation was 184.91 million, based on Refinitiv data.
“We do not foresee a successive reduction in daily active customers in Q1 2019,” said Lara Sweet, Snap’s interim chief financial officer, during a call with analysts following reporting outcomes. She gave no specific outlook on consumer numbers.
Snap shares jumped 22 per cent to $8.62 after hours. That’s still less than half the $17 first public offering price.
The business avoided a third consecutive quarterly decline in users following its redesign, but a few questioned the organization’s ability to grow.
“Snap’s biggest issue continues to be that it lacks appeal beyond its core user base and has no visible direction about the best way best to enlarge or solidify its own app beyond that under-35 demographic,” said Jessica Liu, a marketing analyst at Forrester.
New android app
Snap has also started rolling out its own new Android program to some small percentage of all Snapchat users,” Chief Executive Evan Spiegel said during the post-earnings call. Snap has said that it rebuilt the Android program since it had more bugs along with a worse user experience than its Apple iOS app.
The revamped app is key to gaining new users in developing markets, where apparatus running Google’s Android system are much more popular than iPhones.
“There’s roughly 2 billion people (internationally) who are around Android and do not have Snapchat,” Spiegel said. “If we could take a small percentage of that, it would make a significant impact.”
Snap’s revenue, which it gets from selling advertisements on the app, increased 36 percent to $389.8 million (roughly Rs. 2,800 crores), beating Wall Street’s average estimate of $377.52 million.
Revenue growth was helped in part by new advertisement formats such as unskippable commercials on its own initial displays, which are put on the Discover webpage, a panel on the app that includes publisher content along with influencer content.
Spiegel said during the call the business has improved how it personalizes the Discover webpage for every user, which could attract more advertisers that have been previously concerned about their ads appearing next to unsuitable content.
Snap was “substantially closer” to profitability, since it maintains a level price structure while increasing revenue, Spiegel said. In an internal memo that leaked in October, Spiegel set a goal of reaching profitability by the end of 2019.
Michael Pachter, an analyst at Wedbush Securities, estimates Snap will hit breakeven at the end of this year.
Average revenue per user was $2.09 (roughly Rs. 150) 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.
For the first quarter, Snap said it expects earnings of $285 million to $310 million. That compares with the average analyst estimate for earnings of $307 million, based on information from IBES Refinitiv.