Investors are very relieved about Snap "s latest earnings report: The Snapchat maker not only beat analysts" revenue expectations for Q4 of 2017, but also posted the biggest net user addition in over a year. And when it came to operating expenses, Snap lost $350 million compared to the $440 million they lost last quarter.
Investors were snapping up shares in after-hours trading, with Snap's stock rocketing 25 percent to about $17.60 a share - coming in above its IPO price from last March.
In the previous quarter, Snap has taken a write-down from poor performance of the Spectacles video sunglasses, and it announced a re-design of the app that would make it easier for users to use.
NBCUniversal and Snap Inc past year announced a joint venture to produce original scripted shows for Snapchat.
Snap's sales for the year as a whole doubled to $825 million, impressive growth by the standards of most public companies. This represented 4.5 million new DAUs, or growth of about 17% year-over-year, but just 3% sequential growth. The company reported ($0.14) EPS for the quarter, topping analysts' consensus estimates of ($0.31) by $0.17. Analysts had expected $252.9 million in revenue for the quarter. Now, it has 187 million daily active users, up from 158 million a year ago.
"Our business really came together towards the end of past year and I am very proud of our team for working hard to deliver these results", said Snapchat CEO Evan Spiegel in prepared remarks to Tuesday's earnings call.
It turns out Snap doesn't have the user growth or business growth that everyone initially expected. Ever since the company behind Snapchat publicly unveiled paperwork with plans for a $20 billion IPO nearly exactly a year ago, concerns have surfaced about Snap's long-term viability.
During Snap's third quarter earnings call, co-founder and CEO Spiegel acknowledged that Snapchat is harder to understand than he initially realized.
If Snap can make real revenue for media companies, they'll be more likely to partner with Snap on things like shows or stories down the line.
Advertising revenue rose 74 percent to $281 million, as companies advertised more in the key holiday quarter.