Snap beats profit estimates, shares rally
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The news: Snap has reported better-than-expected fourth quarter earnings as the Snapchat owner benefited from improvements in its advertising platform, sending its shares higher in after-hours trading.
The numbers: The Snapchat owner reported a 14% lift in fourth quarter revenue to USD1.56 billion ($2.49 billion), slightly better than analyst estimates. Adjusted earnings per share came in at 16 US cents, beating market expectations of 14 cents.
Daily active users increased 9% year-on-year to 453 million, beating expectations of 450.8 million.
Snap shares rallied 12% in extended trading in New York after the announcement.
The context: The California-based company expects March quarter revenue to be between USD1.33 billion and USD1.36 billion, slightly above analyst forecasts, while adjusted earnings are expected to be between USD40 million to USD75 million, with Snap attributing the drop to “investment plans”.
The company has been making investments in artificial intelligence and machine learning tools in recent years to help automated placement of personalised advertisements. That has helped tap small and medium sized advertisers, who were the largest contributor to its ad revenue growth in 2024.
The sources: Snap media release, Reuters
