Snap Inc, the owner of the social media app, Snapchat, said it experienced a massive boost of users and revenue in its latest quarter. The surge would put the company back on track with other industry giants such as Facebook Inc.’s Instagram. Snapchat all but lost investor support after its initial public offering last year.
According to Snap Inc, users were spending more time on Snapchat, after the Android version’s overhaul which allowed advertisers to market their products at a cheaper rate.
Snapchat saw its daily active users increase to 187 million in the quarter that ended Dec. 31 from 178 million in the third quarter. The rise exceeded analyst’s initial expectations of 184.2 million users.
Profits surged 72 percent to $285.7 million, once again beating analyst’s forecasts of $253.2 million as companies advertised more during the holiday quarter.
While Instagram has double the number of daily users, it threatened to dismantle Snapchat’s success by copying several of its features such as disappearing slideshows and photo filters.
“They are going to continue to be competitors, and Snap is doing a creditable job of competing for revenue,” said Michael Pachter, an analyst at financial services firm, Wedbush Securities.
Hope that Snapchat could compete with Instagram all but faded after the instant messaging app was reported to have problems growing its user base.
Snap Inc. shares traded at $17.09 in after-trading hours, up 22 percent.
The company also planned to overhaul Snapchat as to increase user accessibility. Chief Executive, Evan Spiegel, said that the new version was made available to 40 million users and that it would launch worldwide in the first quarter.
Spiegel also addressed concerns regarding Snapchat’s target audience, many believing it to be millennials.
“We believe that the redesign has also made our application simpler and easier to use, especially for older users.” Spiegel said.
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