Snapchat parent company Snap has exceeded Wall Street’s quarterly profit estimates, driven by improvements to its advertising platform. The company’s shares rose 6% in extended trading following the announcement.
Analysts attribute the boost to uncertainty surrounding a possible TikTok ban in the US, which could benefit Snap’s business. CEO Evan Spiegel stated that advertisers are focusing on contingency planning and diversifying their spend due to this uncertainty.
Snap has been investing in artificial intelligence and machine learning tools to create more personalized ads. The company has seen success with direct response ads, particularly among small-and mid-sized businesses, which now contribute significantly to ad revenue growth.
In the fourth quarter, Snap reported 14 million Snapchat+ subscribers, doubling from the previous period. The company plans to introduce new advertising features, such as Sponsored Snaps and Promoted Places, to expand its reach.
Snap’s adjusted earnings per share of 16 cents beat analysts’ estimates of 14 cents, while daily active users increased 9% to 453 million, exceeding predictions of 450.8 million. The company forecasts first-quarter revenue of $1.33 billion to $1.36 billion and expects adjusted EBITDA of $40 million to $75 million.
Source: https://www.reuters.com/technology/snap-beats-profit-estimates-strength-advertising-platform-2025-02-04