That narrative changed on Tuesday after Snap Inc. scored a massive beat on its quarterly earnings report, recapping revenue and user growth 2017.
Daily active users rose 18 percent from a year earlier, reversing a trend of slowing growth.
In other news, CFO Andrew Vollero sold 70,566 shares of the business's stock in a transaction dated Monday, December 18th. The turnaround appears to be showing signs of life, he added, "although they have much wood to chop ahead and competitive headwinds abound with Instagram front and center". For 2018 Snap is expected to generate $1.47 billion in net worldwide ad revenue, which is up 90% from 2017, but that's a 0.6% share of the overall worldwide digital ad market, says eMarketer, and pales in comparison to Google and Facebook. Wall Street apparently loves to see Snapchat's growth rate recovering after a long decline since Instagram Stories launched.
Snap's sales climbed to $285 million in the fourth quarter, up 72% from the same period a year earlier. The company reported ($0.14) EPS for the quarter, topping analysts' consensus estimates of ($0.31) by $0.17.
SNAP has been the subject of a number of other research reports. Snap has invested heavily in driving its ad business forward, buying a company that helps measure in-store foot traffic, and adding ad-serving tools for its clients. That falls short of analysts' forecasts of 21 cents a share loss.
Snapchat closed the year with $825 million in revenue, which was double the revenue of 2016.
Snap spends a ton of money and the company is still not profitable.
The improved margin "shows that they can control costs of user acquisition and of providing service, and that should eventually lead to the leverage necessary to become profitable", analyst Michael Pachter of Wedbush Securities said. Snap reported a net loss of $350 million for the quarter.
"We ended 2017 confident that we can grow our Snapchat community and monetize our products more efficiently than ever before", Spiegel said.
It will also move many of its headquarters employees to leased facilities in Santa Monica, California, during the first half of the year, Vollero said.