Snap Inc. (SNAP) has posted a surprise profit and beat expectations for the fourth quarter, despite a mixed outlook for the current quarter. The company reported earnings of $1.56 billion in revenue, a 14% increase from the same period last year, with an adjusted earnings per share (EPS) of 16 cents.
The results surpassed analyst estimates, which had predicted a loss of 4 cents per share on sales of $1.55 billion. Snap’s daily active users increased by 9% to 453 million, exceeding expectations of 451 million.
However, the company’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) forecast came in lower-than-expected at $57.5 million for Q1, despite analyst projections of $79 million prior to the report.
Despite this, investors reacted positively to the news, with Snap stock jumping over 7% to $12.52 in after-hours action. The company’s CEO, Evan Spiegel, attributed the results to progress made on growing its community and improving depth of engagement, driving top-line revenue growth and diversifying its revenue sources.
The mixed outlook for the current quarter has raised questions about Snap’s ability to sustain its momentum, but investors seem to be focusing on the company’s long-term vision for augmented reality. As Spiegel stated, “As we look ahead to 2025, we see additional opportunities to invest productively in scaling our business given the foundational improvements we have made to our ad platform and the momentum we have established in our go-to-market initiatives.”
Snap’s stock technical rating remains a mixed bag, with an IBD Composite Rating of 60 out of 99 and an IBD Relative Strength Rating of 19 out of 99.
Source: https://www.investors.com/news/technology/snap-stock-snapchat-news-q4-2024-results