The social network, Snapchat, delivered good news for Wall Street on Tuesday. The image messaging service reported a surge in revenues and growth in users for the last quarter building confidence for investors in the company.
In the era of fierce social media competition with Facebook, Snapchat’s successful quarter surpassed forecasts by Wall Street. According to Reuters, upon posting its financial results, company shares went up by more than 20 percent.
It was pivotal for Snapchat to succeed since investor confidence faded in light of the initial public offering a year earlier. In addition, the social networking channel reported customers using the app for longer periods of time on the Android platform.
“Snapchat’s daily active users rose to 187 million in the quarter that ended Dec. 31 from 178 million in the third quarter, beating analysts’ average expectation of 184.2 million users, according to financial data and analytics firm FactSet.”
The social network Snapchat is more popular among teens. Therefore, trying to grow at a considerable rate and increase in adoption will be difficult for the young company.
As stated by Statista, Snapchat has to have the ability to compete with very popular social networks like Facebook and Instagram. Lots of celebrities, small to medium business, corporations, and a variety of different industry experts are already present on those two social channels.
Snap shares surge 20% in late trading after posting improved earnings, and Evan Spiegel says redesigned Snapchat app should launch this quarter.https://t.co/AgGuYGHHJC
— MarketWatch (@MarketWatch) February 7, 2018
“Considering Snapchat’s popularity among teenagers and its lack thereof among older demographics, it’s hard to imagine the platform reaching similar levels of adoption as some of its rivals. Competing with the thriving, Facebook-owned Instagram, which already has more than 500 million daily active users, will always be an uphill battle for the self-declared “camera company.”
Revenue for the company grew by 72 percent. In other words, Snapchat posted $285.7 million in revenues and exceed analysts’ predictions of $253.2 million. In the previously mentioned news release by Reuters, it said Instagram would threaten the rival company by copying key features like the well-known photo filters and disappearing slideshows.
— HYPEBEAST (@HYPEBEAST) February 7, 2018
Facebook does boast a sizeable advantage with a billion plus users. Surprisingly, Snapchat did perform better than the world’s largest social channel in one metric. Snapchat’s daily active user growth rate was 18 percent year-over-year versus Facebook’s 14 percent.
The image capturing social platform grew in relation to regional growth. As reported by Social Media Today, it grew by 3 million users in all regions and in particular saw positive results in Europe.
The company’s CEO, Evan Spiegel, attributed the success of Snapchat running on Android devices. The retention rate grew by approximately 20 percent compared to a year ago.
It will be interesting to see how Snapchat evolves and grows in 2018. Facebook and Instagram enjoy a substantial lead and it will be interesting to see what other new updates the company comes up in the near future.