Snap’s revenue surpassed Wall Street’s forecasts for its December quarter, sending the stock soaring toward its initial public offering price in after-hours trading.
Fourth quarter revenue reached $285.7 million, exceeding the analyst consensus forecasts of $252.95 million. The stock popped on the news — rising nearly 20% from the day’s closing price of $14.06 to $16.82 a share after the market’s close. At one point in trading, Snap’s stock cracked the IPO price of $17 a share.
The company’s losses deepened, to $348 million for the fourth quarter, or 28 cents a share. That also exceeds Bloomberg analysts’ forecasts of a 33 cents per share loss.
Chief Executive Evan Spiegel touted the results, saying annual revenues were grew 104% from a year ago — and Snapchat gained 8.9 million users in the quarter, its biggest quarterly growth since the third quarter of 2016.
The growth came at a lower cost. Cash burn decreased 49% from the prior quarter, even as margins improved.
“We ended 2017 confident that we can grow our Snapchat community and monetize our products more efficiently than ever before,” Spiegel said.
Spiegel said the redesigned Snapchat app, which he announced three months ago, would launch to the entire community in the first quarter. Early tests reveal that the app is easier to use — especially for older users.
Snap Chief Strategy Officer Imran Khan talked about the strength of Snap’s ad suite — including a recently launched product called Lens Studio, which makes it easier to the Snapchat community and advertisers to created augmented reality overlays called “lenses.”
The messaging platform is clearly courting Hollywood — with Khan noting that Snap worked with an unidentified studio on the opening weekend of a film, with Snap users 22% more likely to make a movie promoted on its platform their first choice when showing up at the megaplex.