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Snap surges above its IPO price after its big earnings beat

Snap surges above its IPO price after its big earnings beat

Following the Snap Inc (SNAP) earnings release, the company's stock skyrocketed in after-hours trade, climbing by more than 20% to as high as $17.80 as investors were undoubtedly cheerful about the beat on user adds.

Snap brought in almost $286 million in revenue during the fourth quarter of 2017, up 72 from the same period the previous year. Snap reported a net loss of $350 million for the quarter. Spiegel used the company's Q3 earnings to announce some drastic changes, including a revamped app that launched to some users in November. Wall Street, however, is looking for the company to report revenue of $253 million, up 52% from Q4 2016.

If you want to know how a company like Snap can lose nearly $3.5 billion in a year, look no further than stock rewards to engineers.

Average revenue per user, a closely watched number, rose 46 percent to $1.53 in the final period of 2017, while a similar measure of costs grew much more slowly, according to the company.

Snap rolled out a Do Not Disturb feature that allows Snapchat users to silence notifications from specific people and groups, keeping the muted parties in the dark.

"Our business really came together towards the end of previous year", Spiegel said in remarks prepared for a conference call with analysts. It's a significant boost in users since the third quarter of 2017, when Snapchat added just 4.5 million DAUs. Analysts had expected Snap to report 184.2m users, according to FactSet. He also cited improvements to the company's Android app as part of the reason DAU numbers have risen, saying "people who try Snapchat on Android are much more likely to stick around and become Daily Active Users". Previously, Snap made a bet on hardware - its Spectacles - but ended up losing $40 million on the video-recording sunglasses last quarter when they proved to be far less popular than expected.

The social-media company on Tuesday said it doubled its loss in the fourth quarter, but sales rose 72% to $285.7 million, besting Wall Street's revenue forecast and reviving growth after three consecutive quarters of a slowdown.

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