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Snap stock price skyrockets after earnings top forecasts

Selling followers on social media
Selling followers on social media 03:44

Snap's (SNAP) revenue beat analyst forecasts for the first time since the messaging company went public nearly a year ago, leading its shares to reverse a nearly year-long decline. 

Snap on Tuesday reported a loss of $350 million in its fourth quarter, or 13 cents per share after adjusting for one-time gains and costs. The average estimate of 10 analysts surveyed by Zacks Investment Research was for a loss of 15 cents per share.

Snap's revenue was $285.7 million for the period, also beating Street forecasts. Its daily user count of about 187 million was 5 percent higher than the 178 million it counted in November

For the year, the company reported a loss of $3.45 billion, or $2.95 per share, with total revenue of $824.9 million.

Snap's stock, which has 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.

Is Snap sustainable? 08:09

The surprisingly positive financial announcement marks a potential turning point for the social networking company, CNET reported. When Facebook offered to buy it for $3 billion in 2013, 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.

But since it went public, Snap has struggled to grow, not least because of competition from Facebook-owned Instagram, which has copied many of Snap's features. 

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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