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Investing.com -- Snap Inc (NYSE:SNAP) shares jumped around 5% in Wednesday's premarket trade after the Snapchat owner posted better-than-expected quarterly earnings and issued an upbeat outlook on the back of stabilizing digital ad spending.
The social media company reported earnings per share of $0.16, comfortably beating analysts’ estimates of a loss of $0.04. Revenue rose to $1.56 billion, slightly ahead of Wall Street expectations of $1.55 billion.
"Active advertisers more than doubled in Q4, with the improvements we have made to our advertising platform driving improved advertiser performance and helping to grow revenue 14% year-over-year,” said CEO Evan Spiegel.
Daily active users (DAUs), a key metric for social media companies, climbed to 453 million in the quarter, and Snap projected first-quarter DAUs to reach about 459 million.
The company expects first-quarter revenue to range between $1.325 billion and $1.360 billion.
"We continue to see encouraging trends in engagement metrics, including increased content-active days among less frequent and more casual users," Snap said in a statement.
Snap has been reviving its advertising business following a slump in recent years. The company also plans to expand its full-time headcount by 8% to 10% over the course of 2025.
Stifel analysts maintained a Hold rating on Snap stock after the report. "We remain on the sidelines until we have better visibility to more predictable and sustained revenue growth, and more clarity on the TikTok outcome," they wrote.
RBC Capital Markets analysts also reiterated a Sector Perform rating, but raised their estimates on "solid" Q4 results.
"We think SNAP’s aspirations to transition user engagement to Spotlight represent its biggest breakout opportunity for better monetization in years—question is, how long would that take to happen?" they wrote.
Pratyush Thakur contributed to this report.
