Snapchat company share price shoots up by a quarter
A significant increase in revenue in the past quarter has restored Wall Street's faith in the photo app Snapchat. The shares of parent company Snap jumped by more than a quarter in after-hours trading on Thursday.
Years of restructuring advertising systems finally paid off for the photo app Snapchat. The turnover of the operating company Snap rose by 21% year-on-year to almost 1.19 billion US dollars in the last quarter.
Just three months ago, the share price plummeted by more than 30 percent following the disappointment of the last quarterly figures.
Stricter privacy settings
Snap had once accustomed investors to growth rates of more than 50 percent. But then the growth stopped, partly because of Apple's measures for more privacy on the iPhone. Developers such as Snap now have to explicitly ask users for permission if they want to track their behaviour across various apps and services in order to personalize advertising. Many users rejected this - and this shattered numerous advertising models, including at the Facebook group Meta.
In contrast to Meta, Snap CEO Evan Spiegel was in favor of the Apple changes. However, the Snapchat company struggled for a long time to set up new, efficient processes for online advertising and to significantly increase sales again.
Cost-cutting measures due to red figures
At the same time, Snap remains in the red. In the last quarter, the company posted a loss of 305 million dollars, compared to a loss of 328.7 million dollars a year ago. Snap boss Spiegel has already resorted to cost-cutting measures to counteract this.
The number of daily active users rose from 414 to 422 million within three months. Snapchat once became popular with images that disappeared on their own. The service now also relies on augmented reality, where digital objects are integrated into real environments. Fashion companies, for example, use this technology to let users try on their products virtually on Snapchat.
Snap forecast revenue of between 1.225 and 1.255 billion dollars for the current quarter, which was already at the lower end of the analysts' estimate range. (SDA/swi)
