Snap adds more users, still misses quarterly revenue estimates
Feb 4, 2020
Snap Inc added more users to photo messaging app Snapchat in the fourth quarter, but missed Wall Street estimates for revenue on Tuesday, hurt by a shorter holiday season.
Popular for its photo visual effects which allow users to change gender in photos and add dog face filters, Snap had earlier warned its peak advertising demand period, which runs between the Black Friday and December holidays, had one fewer week.
Despite stiff competition from Facebook Inc's Instagram and newer apps like TikTok for user's screen time, Snap said its daily active users (DAU) rose 4% to 218 million in the three months ended Dec. 31, from the prior quarter.
The user metric stood at 186 million a year earlier.
DAU, which represents the number of people using the app on a daily basis and is a widely watched metric by investors and advertisers, was above analysts' average estimate of 215.04 million, according to IBES data from Refinitiv.
Average revenue per user jumped 23% to $2.58 during the quarter from a year earlier.
Revenue, which the company generates from selling advertising on Snapchat, rose 44% to $560.88 million, but missed the average analyst estimate of $563.03 million.
"Given the substantial long-term opportunities ahead, we are working hard to scale our revenue so that we are able to self-fund our investments in the future," Chief Executive Officer Evan Spiegel said in prepared remarks.
Snapchat has only 0.5% of worldwide digital ad revenue, while Facebook accounts for 21.1%, according to a report by market researcher eMarketer.
Snap's net loss widened to $240.7 million (184.7 million pounds), or 17 cents per share, from $191.67 million, or 14 cents per share, a year earlier.
The company expects first-quarter revenue in the range of $450 million to $470 million. Analysts on average were expecting $461.6 million.
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