Snap Inc (SNAP) Earnings: Daily User Adds Beat Estimates, Stock Skyrockets

Snap Inc (SNAP) released its 4Q earnings results after closing bell tonight. The Q4 2017 Snap Inc (SNAP) earnings report revealed non-GAAP losses of 13 cents per share on $285.7 million in revenue. Analysts had been expecting losses of 14 cents per share on $252.7 million in revenue. In the year-ago quarter, Snap Inc (SNAP)’s revenue $165.7 million.

Snap Inc (SNAP)
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Q4 2017 Snap Inc (SNAP) earnings

On a GAAP basis, Snap Inc (SNAP) posted losses of 28 cents per share. Adjusted EBITDA was a loss of $158.9 million, compared to the adjusted EBITDA loss of $152.3 million in the year-ago quarter. Snap Inc (SNAP) reported $219 million in North America revenue, $40 million in Europe revenue, and $26 million in Rest of World revenue, beating estimates in all three regions. Analysts had been expecting North America revenue to amount to $198.1 million, Europe revenue to reach $32.4 million, and Rest of World revenue to amount to $18 million.

Average revenue per user grew 46% year over year to $1.53, which is much better than the $1.36 per user that had been estimated prior to the Snap Inc (SNAP) earnings release. Average revenue per user in North America grew to $2.75, while in Europe, it rose to 66 cents. In the Rest of the World, average revenue per user increased to 56 cents.

Cost of revenue per user fell sequentially to $1.02 in Q4 2017.

Snap beats consensus on user adds

The social media firm added 8.9 million daily active users quarter over quarter, bringing the total to 187 million for a 5% increase. Analysts had only been expecting Snap Inc (SNAP) to add 6 million daily users for a total user base of 184 million daily users. Snap Inc (SNAP) management said the Q4 2017 result was the best quarter for user adds since Q3 2016. On a year-over-year basis, Snap Inc (SNAP)’s user base increased 18% or 28.8 million.

In Q4, Snap Inc (SNAP) had 80 million users in North America, 60 million users in Europe, and 47 million users in the Rest of the World.

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.