Snapchat parent Snap Inc. swung to an adjusted profit of three cents per share in the fourth quarter, an improvement from a loss of four cents a share. Wall Street analysts had expected the company to break even.
The social media company said daily active users increased 17% in the period, to 218 million, while total revenue climbed 44% to $561 million. The revenue figure undershot Wall Street expectations by $2 million, sending the company’s stock tumbling more than 12% in after-hours trading.
At the end of regular trading, Snap Inc. shares closed at $18.99, up 4% and near a two-year high. It was barely one year ago that the company’s shares were climbing out of a deep hole after a series of setbacks, including management turnover and unfavorable reaction to the company’s app redesign.
The growing Discover platform made a significant contribution to the results, the company said. Total daily time spent by Snapchat users watching Discover rose 35% over the prior-year quarter. While teens and college-age users remain the most avid subset of the total user base, older Snapchat users latched onto Discover content in the quarter. Time spent by over the age of 25 watching Discover increased by 60% year-over-year. More than 50 shows reached a monthly audience of at least 10 million viewers.
“The strength in our core business gives us confidence in our long term growth and profitability and we’re excited to build on these results in 2020 and beyond,” CEO Evan Spiegel said.