Snap said the number of people Utilizing its Snapchat app would remain at Present levels this past Quarter, easing Concerns the company would continue to lose users to rival Facebook’s Instagram and sending its shares up over 20 percent.
The photo-messaging program, famous for its disappearing messages and filters which turn people into dogs or even tacos, has struggled since going public in March 2017, as Instagram has replicated many of its publication features. A controversial redesign also alienated some of Snapchat’s advertisers and users.
In the fourth quarter Snap topped Wall Street with 186 million daily active users, flat with the previous quarter and down 1 million from the same period one year ago. Analysts’ average expectation was 184.91 million, according to Refinitiv data.
“We don’t foresee a successive reduction in daily busy customers in Q1 2019,” said Lara Sweet, Snap’s interim chief financial officer, during a call with analysts following reporting results. She gave no particular outlook on consumer numbers.
Snap shares jumped 22 per cent to $8.62 after hours. That’s still less than half of the $17 first public offering price.
The company avoided a third successive quarterly decrease in users following its own redesign, but a few questioned the organization’s ability to grow.
“Snap’s biggest issue is still that it lacks appeal beyond its core user base and has no visible management about the best way best to enlarge or pivot its app beyond the under-35 demographic,” explained Jessica Liu, a marketing analyst in Forrester.
New android program
Snap has also begun rolling out its new Android program to some small percentage of all Snapchat users, Chief Executive Evan Spiegel said throughout the post-earnings call. Snap has said it rebuilt the Android app because it had more bugs and also a worse user experience than its Apple iOS program.
The revamped program is key to getting new users in developing markets, in which apparatus running Google’s Android system are much more popular than iPhones.
“There is roughly 2 billion people (globally ) who are around Android and don’t possess Snapchat,” Spiegel said. “If we can take a small number of this, it would make a big difference.”
Snap’s revenue, which it receives from selling advertisements on the program, increased 36 percent to $389.8 million (approximately Rs. 2,800 crores), beating Wall Street’s average estimate of $377.52 million.
Revenue growth was helped in part by new advertisement formats such as unskippable commercials on its own original shows, which can be housed on the Discover webpage, a panel on the app which includes publisher content along with influencer content.
Spiegel said during the call that the company has improved how it personalizes the Discover webpage for every single user, which might attract more advertisers who have been formerly worried about their advertisements appearing alongside unsuitable content.
Snap was now”substantially closer” to profitability, as it maintains a level price structure while increasing revenue, Spiegel said.
Michael Pachter, an analyst at Wedbush Securities, estimates Snap will reach breakeven by the end of the season.
Average revenue per user was $2.09 (roughly Rs. 150) through the fourth quarter, up from $1.53 from the year-ago quarter.
That measurement of earnings grew the maximum for consumers outside North America and Europe, hitting $1.24 during the quarter, up from 56 cents in the year-ago quarter.
For the first quarter, Bloomberg stated it expects revenue of $285 million to $310 million. That compares with the average analyst estimate for earnings of $307 million, based on information from IBES Refinitiv.