Snapchat shares opened sharply in the green in the US Wednesday, after the chat app reported strong fourth quarter results late Tuesday. Not only did they show healthy user growth, but revenues impressed investors, too.
Snapchat shares opened up 24.12% to $17.44. The Snapchat stock closed at $14.06, Tuesday.
Snapchat users like what they see
Snapchat reported 187 million daily active users of its chat app in the fourth quarter of 2017 – up from 178 million in the third quarter and beating analyst’s expectations. That was also an 18% increase from daily active user usage in Q4 2016.
Meanwhile, Snapchat’s revenue hit $285.7 million in the final three months of 2017, a 72% jump from the same period a year earlier, the company reported.
Snapchat also reported its full-year 2017 revenues were 102% up on 2016. Meanwhile, it added 8.9 million daily active users in the fourth quarter – the highest increase in over a year.
“Our business really came together towards the end of last year,” said Snapchat CEO, Evan Spiegel.
“We executed well on our 2017 plan to improve quality, performance, and automation, which removed friction from our advertising business and improved our application for the Snapchat community,” Spiegel added.
Snapchat ad earnings grow
Ad revenue is a big driver of other social media and tech platform businesses and so Snapchat has made some changes to its ad system. And, those changes appear to have worked.
More than 90% of ads on Snapchat were purchased on the new ad auction format, during Q4. In addition, while the price charged by Snapchat per ad impression fell 25%, it’s total ad revenue rose by 38% from the third quarter, to total $281 million. That was also 74% higher than Q4 2016.
“Our work during 2017 is proof that we aren’t afraid to make big changes for the long-term success of our business,” Spiegel said. “We enter 2018 energized by the opportunities in front of us and excited to deliver against our plan for user growth, augmented reality, and content.”