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Snap shares rise sharply as revenue grows
| 05/03/2019
- First-quarter loss smaller than consensus forecasts
- Revenue up by 39%
- Advertising plans gain investor support
Snap Inc. shares were up on Wednesday as a smaller-than-expected loss in the first quarter saw the instant messaging group benefit from increased revenue.
The loss came in at 10 cents per share after adjustments, which was around 2 cents better than expected. Revenue growth came from a 39% increase in sales. This translated to a worth of $320 million, which also beat forecasts. This led to the pre-market share price gains, and the situation could get even better for the company as it predicts revenues will rise to as much as $360 million in the current quarter.
Snap co-founder and CEO Evan Spiegel summed up the news in a conference call to investors late Tuesday when he said: “This is the second consecutive quarter where more than 100% of our incremental year-over-year revenue flowed through to our bottom line.”
“There are billions of Android devices in the world that now have access to an improved Snapchat experience, and we look forward to being able to grow our Snapchat community in new markets,” Spiegel continued.
The company has seen its shares mostly in decline ever since they were priced at $25 when they were first listed back in March 2017. However, they marked 4.5% higher in pre-market trading, and that figure is the best since August and doubled the year-to-date gains.
Investors have recently been impressed with the company’s plans to broaden its advertising reach for the messaging platform by introducing new games, options for photos, and original content programming aimed at its 186 million daily users. Some of these changes were revealed at the social media firm’s first-ever ‘Partner Summit’ last month.