Snap Inc, the parent company of Snapchat, experienced an uptick in its user base during the fourth quarter of 2019. However, the company failed to meet Wall Street’s revenue estimates, which it attributed to a shorter holiday season. Despite facing stiff competition from social media giant Facebook’s Instagram and emerging apps like TikTok, Snap reported a 4% increase in daily active users (DAU), reaching a total of 218 million users by December 2019. This is compared to 186 million users during the same period the previous year.

The number of DAU is a crucial metric for both investors and advertisers, and Snap’s performance surpassed the expectations of analysts, who had estimated around 215.04 million users. Additionally, the company observed a 23% growth in average revenue per user, with the fourth quarter reaching $2.58, surpassing the previous year’s figures.

Advertising sales on Snapchat contributed to Snap’s revenue, which saw a 44% increase to $560.88 million. However, this fell short of the average analyst forecast of $563.03 million. Nonetheless, CEO Evan Spiegel remains hopeful about the company’s future and its ability to finance its future investments. In a statement, he expressed, “Given the substantial long-term opportunities ahead, we are working hard to scale our revenue so that we are able to self-fund our investments in the future.”

Snapchat currently holds a mere 0.5% of the global digital ad revenue, while Facebook maintains a dominant position with a 21.1% market share, as reported by market research firm eMarketer. Snap’s net loss also increased to $240.7 million, or 17 cents per share, from $191.67 million, or 14 cents per share, compared to the previous year.

Looking forward, Snap anticipates its first-quarter revenue to range between $450 million and $470 million. The average analyst estimate was $461.6 million. Despite falling short of revenue expectations, Snap’s increase in user base and average revenue per user demonstrate the company’s potential for future growth and the promising opportunities it has ahead.

Useful links:
1. Snap Inc News
2. eMarketer