Since Snap’s IPO in March 2017, investors have been watching closely to see if the company could fend of competition from Instagram, which integrated “stories” – a feature similar to Snapchat’s ephemeral messaging service.
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Snapchat’s positive Q4 2017 earnings convinced investors the platform can compete with Instagram, sending its share prices up by 46 percent on Wednesday.
By comparison, Facebook announced last week that it saw a slight decrease in DAUs in the United States and Canada, dropping to 180 million and marking the company’s first decline of this kind.
But even with Snap’s 18% growth rate in daily users, a slight acceleration over the third quarter’s 17%, it doesn’t outpace larger rival Facebook, which logged 14% daily active user growth on a base that is many times Snap’s size.
Spiegel said early feedback shows the redesign makes the app easier to user, “especially for older users”.
Extreme Networks reported a fiscal second quarter net loss of $31.9 million, or 28 cents a share, on revenue of $231.1 million, up 48 percent from a year ago. In all of Q4, advertisers could only use the Snap ad auction platform, Ad Manager, to buy Snap Ads.
Snap Inc surprised Wall Street on Tuesday with a rebound in user growth for its Snapchat messaging app, showing resilience amid competition with Facebook Inc’s Instagram and sending shares up almost 30 per cent. 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. After the encouraging financial report for the fourth quarter of 2017, Snap’s shares surged in after-hours trading. Facebook Inc. has copied some of Snapchat’s most popular features for bigger audiences, while a dramatic redesign of the Snapchat app is rolling out slowly.
Looking ahead to this year, Snap is predicted to generate $1.47bn in worldwide ad revenue – up considerably on the $825m achieved in 2017 – according to eMarketer estimates.
Confidence that the two could coexist in the social media sector was shaken when Snapchat´s user growth stalled past year.
The equation is nearly too simple: If Snapchat can make it easier for people to use its app, more people will use it.
“This translated into annual revenues that grew 104 percent from the prior year, and 8.9 million Daily Active Users added in the fourth quarter, the highest number of quarterly net adds since the third quarter of 2016”. More importantly, we increased advertising impressions by over 4x year-over-year while continuing to grow per user engagement.
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Snap (NYSE:SNAP)’s stock had its “hold” rating restated by analysts at Deutsche Bank in a research note issued to investors on Monday, January 22nd. “So it’s not a surprise that ad revenue is increasing, which is great for Snap and consistent with overall industry growth”. It was Snap’s fourth quarterly earnings as a public company.
