Following the Snap Inc (SNAP) earnings release, the company's stock skyrocketed in after-hours trade, climbing by more than 20% to as high as $17.80 as investors were undoubtedly cheerful about the beat on user adds. Snap added almost 9 million daily active users in the last quarter, the most since the third quarter of 2016, pumping its daily user base to 187 million.
But revenues were better than expected, jumping 72 per cent year-on-year to US$286 million. The company reported ($0.14) earnings per share for the quarter, topping the Thomson Reuters' consensus estimate of ($0.31) by $0.17.
For the full year, Snap's revenue rose to $825m, more than double the $404m it made last year. Analysts had been expecting losses of 14 cents per share on $252.7 million in revenue. Deutsche Bank reissued a "hold" rating and issued a $13.00 target price on shares of Snap in a research note on Monday, January 22nd.
Daily active users rose 18 percent from a year earlier, reversing a trend of slowing growth. The highly anticipated redesign, teased to analysts at its third quarter earnings call, has been met with criticism from early users. That would also put Snap's yearly sales at $793 million, nearly double the $404 million it brought in in 2016.
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Wall Street is looking for revenue of $253 million, or a 52 percent jump over a year ago.
That re-design, separating friends from brands, was launched in late November, but has yet to roll out to all users.
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. One of its biggest expenses is the cost of supporting streaming photos and videos-the bulk of the functionality of Snapchat-which Snap said in its earnings presentation accounted for $131 million in costs in this quarter alone. Earlier, they rose 1.5 percent to close at $14.06 in NY. The latest crumb of news to come out of Snap Inc. brings word that there's a new update for its other popular app, Bitmoji, offering tons of new styles.