Snapchat's owner Snap Inc. reported on Tuesday substantial growth in its users and revenue during its most recently-ended quarter, which revived hopes the social media app can survive the competition it has in the form of Instagram, owned by Facebook.
Investor enthusiasm in the instant messaging company faded following last year's initial public offering.
Investors will be glad to hear that more than 90pc of Snap Ads were purchased programatically, meaning the damage caused by the move to an auction-based system that initially hurt ad prices seems to have reduced.
However, net losses increased in the previous quarter, doubling to $350 million. The business had revenue of $207.90 million for the quarter, compared to analysts' expectations of $236.71 million. Not only did they show healthy user growth, but revenues impressed investors, too.
Snapchat divides users into three categories -"North America", "Europe", and "Rest of World". Analysts however said that it appeared Snapchat was willing to look inward in an attempt to fix its problems instead of being distracted by its competition with Instagram.
But, as Snapchat thus slowly sheds it "youth only" exclusivity, it will be interesting to see for how long, and if, they can continue to compete with the social media giants that have already gained a cross-generational foothold. This statement has brought Snapchat's shares up 20%. Monetization also posted a significant jump on a sequential basis, with global average revenue per user (ARPU) rising from $1.17 in the third quarter to $1.53 in the fourth quarter.
Mr. Greenfield said Snap was a communications company that was trying to develop an advertising business.
USA stocks end lower as uncertainty reigns
Hopes that Wall Street won't repeat the scale of Monday's losses helped limit the selling during European trading hours. The S&P 500 posted 1 new 52-week highs and 38 new lows; the Nasdaq Composite recorded 17 new highs and 164 new lows.
Revenue: $285.7 million (£205 million), up 72% year-over-year and above the $252.8 million (£181 million) expected by analysts. Westwood Holdings Group Inc. bought a new position in Snap during the second quarter valued at about $148,000.
Its shares had fallen by half from the US$29.44 high reached after the IPO and have not traded above the US$17 IPO price since July 10. Stocks of Snap Inc. went up 25 percent to around $17.60 per share, which was more than its IPO price.
SNAP has been the topic of a number of research analyst reports.
Snap also redesigned its app's interface to make it easier to use and more accessible to older users, which could explain the increase in daily active users.
"Our business really came together towards the end of a year ago and I am very proud of our team for working hard to deliver these results", Snap cofounder and CEO Evan Spiegel said on an earnings call with investors.
Losses of $3.45bn compared to a $514m loss past year.
Deutsche Bank analyst Lloyd Walmsley said in a note about the Q4 Snap earnings release that although he had picked up improving user trends before the release, the company also showed strength in advertising, which he called a "complete surprise".