Published: Fri, February 09, 2018
Markets | By Terence Owen

Snap Is Growing Faster Than Facebook In North America: Q4 Results Revealed

Snap Is Growing Faster Than Facebook In North America: Q4 Results Revealed

Snapchat has finally made investor concerns disappear.

Snap shares jumped 47.6% to 20.75 on the stock market today.

To head off this assault, Snap needs to grow.

That's exactly the Google and Facebook playbook - building a huge ad business by working with thousands of small advertisers. The company's growth appears to be driven by a surge in automated, or programmatic, advertising.

"Our business really came together toward the end of previous year", said Spiegel on Tuesday, according to CNN. Once a company develops a narrative - Twitter's reputation that it can't grow, for example - it can be tough to shake.

More recently, Snap released a new in-app merchandise store as it continues its experiments to see what users are willing to pay for.

However, three months later, that redesign has still not rolled out widely, and investors will be looking for answers as to what's taking so long. For starters, it will make its newest ad format, Promoted Stories, available to self-serve advertisers "in the coming week", said Snap Chief Strategy Officer Imran Khan on Tuesday. Where is it? And how is the rollout going? This represented the highest daily net user additions since the third quarter of 2016.

The Los Angeles company said revenue soared 72 percent, to $285.7 million.

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On a per-share basis, the Venice, California-based company said it had a loss of 28 cents.

"They are in the process of building credibility with Wall Street", said Rich Greenfield, an analyst at BTIG.

After struggling to grow its audience throughout the year, Snap unveiled a significant redesign in November meant to make its messaging service less confusing for users. It's nowhere close to that right now.

As with the automation of its Snap Ads, the automation of Snap's Promoted Stories and Creative Tools formats will likely lead to more of these ads being sold, but for less money per ad.

Snapchat's daily active users rose to 187 million in the quarter ended December 31 from 178 million in the third quarter, beating analysts' average expectation of 184.2 million users, according to financial data and analytics firm FactSet. That growth never happened, but the costs are still there.

The biggest issue for Snap is its competition with Facebook's Instagram, says eMarketer analyst Debra Aho Williamson.

The silver lining in a hard 12-month period for Snap is that it continues to grow both users and revenue despite Facebook's ruthless attempts to demolish it. Facebook's copies have certainly hurt the company, but they have not killed it yet. Westwood Holdings Group Inc. bought a new position in Snap during the second quarter valued at about $148,000. What are Snapchat's commerce plans?

Media coverage about Snap (NYSE:SNAP) has been trending somewhat negative on Wednesday, Accern Sentiment reports. It will hold an investor call with analysts and reporters at 5 pm ET.

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