Snap's earnings show it isn't about to ghost us
The social network reported surprisingly higher sales and active users, the latest indication its redesign and new ad efforts are working.
Snap, which makes the Snapchat app, has been struggling to stay ahead of Facebook and Instagram.
Facebook and Instagram may have successfully borrowed a lot of Snap's designs, but it still has a few tricks up its sleeves.
The social networking company, known for its disappearing messages and popularity among teenagers, surprised Wall Street Tuesday when it announced better-than-expected fourth quarter sales of $285.7 million and a daily user count of about 187 million, 5 percent higher than the 178 million it counted in November last year.
Investors were impressed. The company's shares, which have nearly halved in the past year, rose more than 20 percent in after-hours trading to $16.95.
"Our business really came together towards the end of last year," said Evan Spiegel, Snap's CEO, in a statement.
The surprisingly positive financial announcement marks a potential turning point for the social networking company, which Facebook offered to buy for $3 billion in 2013. Back then, Snap had an innovative new app built on the idea of quickly-disappearing messages.
It also championed other new ideas, such as augmented reality "filters" that add computer graphics to a photo or video, and "stories," groups of photos or videos strung together.
In the year since it went public, Snap has struggled to grow or show a profit (it posted a net loss of nearly $350 million in its fourth quarter, and more than $3.4 billion for the year). The company blamed some of the struggles on its app, which is notoriously hard to use.
The company has redesigned its app to give it a personalized feel and a focus on friends who post news.
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