Snap Inc. reported a stronger-than-expected gain in fourth-quarter revenue, signaling success in its ongoing advertising business overhaul. The company posted revenue of $1.56 billion, surpassing Wall Street's expectations of $1.55 billion, and marking a 14% increase from the previous year. This growth was largely driven by a 10% year-over-year rise in advertising revenue, which totaled $1.41 billion. Snap's global daily active users also exceeded expectations, reaching 453 million, up from the anticipated 451.1 million. CEO Evan Spiegel highlighted the company's progress in enhancing its advertising platform, which has led to improved advertiser performance and a doubling of active advertisers in the fourth quarter.
Snap's upbeat forecast for the current period further fueled investor optimism. The company expects first-quarter revenue to range between $1.325 billion and $1.36 billion, with the midpoint surpassing Wall Street's projection of $1.33 billion. Despite a cautious outlook on first-quarter adjusted earnings, Snap remains optimistic about its investment plans for 2025, particularly in scaling its business and enhancing its ad platform. The company also reported a significant swing to profitability, with a net income of $9.1 million compared to a net loss of $248 million in the same quarter last year, attributed to improvements in adjusted EBITDA and reductions in stock-based compensation expenses.
Snap Inc. shares closed at $11.60 on February 4th, up 3.85% from the previous close of $11.17, and surged 9.31% in after-hours trading to $12.68.