Snap Inc. stock dropped 14% after revenue fell short of expectations by MichaelFNunez
... [+]SOPA Images/LightRocket via Getty Imagesfourth-quarter earningsThe company reported revenue increased by 44% to $561 million on the quarter, falling short of Refinitiv forecasts of $563 million. Net loss increased to $241 million, or 17 cents per share.
The social media company’s shares skyrocketed by more than 144% in 2019 following strong revenue and traffic growth. Today’s miss ends a yearlong streak during which the company appeared to be bouncing back from a stark decline when it went public three years ago.following a drastic change to the design of the app. But the company accelerated user growth in 2019 as it rolled out more augmented reality camera filters and focused on developing its Android app.
One of the key metrics for Snapchat continues to be its daily active users , which increased 17% year-over-year to 218 million. The app faces increasing competition from Facebook, Instagram and TikTok, who offer many similar features on their respective platforms. Snapchat’s growing user base should encourage advertisers to continue spending on its platform.
"Snap slightly beat our expectations for revenue in the 2019 fiscal year, and the growth of its ad business shows that marketers want to engage with its youthful audience,” said eMarketer principal analyst Debra Aho Williamson. Even with its promising revenue growth over the past year, Snap continues to control just a sliver of the U.S. digital ad market. The company is estimated to have a 0.7% share of the U.S. digital ad market and 1% of the U.S. mobile ad market, according to eMarketer.
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