Snap's revenue beats estimates as user base stops shrinking
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Snap Inc. is figuring out how to squeeze more revenue out of a stagnant user base.
The company, maker of the photo-messaging app Snapchat, reported $389.8 million in fourth-quarter sales, exceeding the $377.5 million average analysts’ estimate. Though Snap failed to add any new users since the prior period, the steady numbers are a victory considering that analysts projected the amount of people using Snapchat daily would shrink. The company said it’s “cautiously optimistic” that users will remain level again this quarter. The stock surged more than 20 percent in late trading.
Snap said it has been able to add more advertisers using its automated advertising tools, increasing demand and therefore boosting prices for promotions on the mobile app. After a volatile year of executive departures, a redesign that outraged some users, and problems with the Android version of Snapchat, Chief Executive Officer Evan Spiegel is working to make the most of the social-media platform and trying to grow the still-unprofitable business into something more sustainable, he told investors Tuesday in remarks prepared for the earnings report.
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