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Snap shares significantly up after strong quarterly report
Snap shares shoot up: Snap moves into the profit zone and surprises investors. Find out more about the latest developments at Snapchat!
Snap shares significantly up after strong quarterly report
Snap stock is soaring in after-hours trading on Thursday as Snap's photography app Snapchat finally breaks into profit. The company's sales rose 21 percent year-on-year to just under $1.19 billion in the last quarter. This positive development led to a 27.06 percent increase in shares to $14.49 in trading on the NYSE. This marks a remarkable turnaround after the share price fell sharply three months ago.
In the past, Snap had spoiled investors with rapid growth of more than 50 percent. But growth stagnated, partly due to Apple's moves to ensure more privacy on the iPhone. These changes made it more difficult for companies like Snap to track user behavior across different apps in order to deliver personalized advertising. Despite these challenges, Snap CEO Evan Spiegel supported Apple's changes.
Despite the sales growth, Snap remains in loss. In the most recent quarter, the company reported a loss of $305 million. To counteract this, Snap boss Spiegel has already taken cost-cutting measures. The number of daily active users increased from 414 to 422 million in the last quarter. Snap also relies on augmented reality to integrate digital objects into real-world environments.
For the current quarter, Snap forecast sales between $1.225 billion and $1.255 billion, meeting analysts' estimates. Snap's positive development shows that the company is on the right track and that investors are regaining confidence.