Snap returns back as snapchat user numbers grow

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The success of Snap Inc. is booming and progressing. on the basis of Snapchat users.

When the number of users began to decline in early 2018 due to trivial redesign and flabby Android app, its stock-priced long slide began to less than $ 5 share. Subsequently the executive performed, and it seemed that there was a dark cloud hanging over the future of Santa Monica's company.

When his earnings report in February showed that the suspension had stopped, snap shares began at rally, more than double the price after closing at $ 11.99 on Tuesday.

After last Tuesday, Snap issued its first quarter earnings report, which had more news in it: Its user base grew 2% to 190 million – the company says 90% of people included between 13 and 24 years of age and 75% of people aged 13 to 34 years of age in the United States. Snap shares focused on post-market trade, adding up to $ 13 before some of these gains were returned.

As well as reversing the decline in users, there is a steady increase in the amount of money generated from each of these sets, above the expectations of viewers and more. Snap contributed a net loss of 10 cent on a share for the quarter, an improvement of 17 cent share in the same quarter last year.

Revenue was $ 320 million in the quarter, up 39% from the previous quarter, which it said.

Much of this positive change came from fine tuning the company's algorithm advertising platform after a rocky launch, said Evan Spiegel, co-founder and chief executive of 28 years of the company.

“The improvements we have made to our cost structure over the past year have been largely due to the efficiencies we have received in our products and operations which exceeded our growing investments across our materials, gambling. , increased reality and advertising platforms, ”Spiegel said in a statement.

Snap announced a series of new products at its first major-media event last month, including social gaming, a new tag of Snapchat's unique script shows, and a series of integrated video ad tools for utility utility. increase advertising.

Snap has three years to make a profit before it goes out of money »

The company identified some of the highlights in the number of users with the long-term redesign of the Snapchat app for Android phones, which includes the narrow majority of smartphones in the United States. But they are a major market leader in the rest of the world.

For years, the Snapchat app was too intense processor and data to run efficiently on many Android handsets, especially the more affordable models that were popular in developing countries. The hope is that the new light version, supported by efforts to grow some of Snapchat's enlarged reality lenses and other culturally distinctive products to new markets such as India and Malaysia, will continue to grow abroad.

There is a cost for growth. Millions of new users need more computer space to deliver content quickly, and the company says that Amazon Web Services and Google Cloud bills will result in higher losses in the second quarter of 2019.

Analysts are feeling bullish as Snap draws off its long slide.

“Over the past year, he has always felt that they were deer,” said Richard Greenfield, an analyst at BTIG. “The recovery has begun.”

It is inspired by Snap growing its user base, offering more to advertisers and last month it offers a series of new products available as games – which are not yet worthwhile to spend more time on. the app, and increased income as a result. .

sam.dean@latimes.com

Twitter: @samaugustdean

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