Snap Inc. beat Wall Street consensus expectations for income and revenue for the first time as a public company during its most recent quarter, driven by a boost in users.
The Snapchat parent company added 8.9 million net daily active users in the fourth quarter of 2017, up 5% year over year, to end 2017 with 187 million total DAUs. The company noted the last quarter of 2017 saw the highest number of net DAU adds in over a year. Snap defines a daily active user as a registered Snapchat user who opens the Snapchat application at least once during a defined 24-hour period. Average revenue per user came to $1.53 in the fourth quarter of 2017, up 46% year over year.
Net losses widened, however, to $350.0 million, or a loss of 28 cents per share, compared to $169.9 million, or a loss of 20 cents per share, in the fourth quarter of 2016. The S&P Capital IQ consensus estimate for the quarter was a loss of 33 cents on a GAAP basis and a loss of 16 cents on a normalized basis.
Revenue for the quarter ended Dec. 31, 2017, was $285.7 million, up 72% year over year from $165.7 million.
In an earnings call Feb. 6, CEO Evan Spiegel said Snap's recent app redesign, which he credited with driving gains in viewer engagement and ARPU, will be made available to all users during the first-quarter 2018. Snap in November 2017 announced a large-scale update to more clearly separate user-generated content from publisher content.
Executives said the company saw improvements in Snapchat's Android app performance during the quarter, boosting retention by 20% compared to a year ago. Snap is also working with wireless carriers in over a dozen markets to reduce the costs of using Snapchat through data discounting programs.
CFO Andrew Vollero said he expects year-over-year revenue growth rate to stabilize from its fourth-quarter pace in the current quarter, though the company did not provide guidance on its total expected revenue for the period.
