(Bloomberg) –Snap Inc.’s revenue topped analysts’ estimates for the first time since the company went public almost a year ago, buoyed by momentum in its advertising business and user growth.
Shares of the company jumped as much as 29% in extended trading following the results. Earlier, they rose 1.5% to close at $14.06 in New York.
Snap, which makes the Snapchat photo-messaging app, said fourth-quarter sales jumped 72% to $285.7 million, beating the $252.8 million average projection of analysts, according to data compiled by Bloomberg. Snapchat had 187 million daily active users in the fourth quarter, up 18% from a year ago and ahead of the 184.3 million analysts estimated.
The company has been automating its ad-buying system to draw in more marketers. That dented ad prices, but this was offset by a higher number of ad views and customers.
The results mark a rare win for Snap, whose first year as a public company has been hobbled by stagnant user growth and management departures, including the loss of its heads of product and engineering. Larger social-media rival Facebook Inc. has copied some of Snapchat’s most popular features for bigger audiences, while a dramatic redesign of the Snapchat app is rolling out slowly—and to lackluster reviews so far.
The numbers on Tuesday may help lead Wall Street back to its original thesis on the company: that Snap, already popular with young people, has a lot of growth potential.
“We continue to view Snap’s audience and platform as a unique asset in the digital media space with a long monetization runway,” says John Egbert, an analyst at Stifel Nicolaus, in a note to investors before the results. The fourth quarter was an “important quarter for Snap, as investor confidence in the company’s growth story has waned.”
Excluding certain items, the Los Angeles-based company reported a loss of 13 cents a share, compared to the 16-cent loss analysts predicted. The net loss was $350 million in the fourth quarter, for a full-year loss of $3.45 billion.
Average revenue per user, a closely watched number, rose 46% to $1.53 in the final period of 2017, while a similar measure of costs grew much more slowly, according to the company.
“Our business really came together towards the end of last year,” CEO Evan Spiegel says in a statement.