SAN FRANCISCO — Snap misplaced tens of millions of customers final 12 months after an unpopular redesign of Snapchat, its ephemeral-messaging app. Now that exodus seems to be slowing.
The firm stated on Tuesday that it had stanched the movement of folks leaving its platform. Snap’s day by day lively customers totaled 186 million in the fourth quarter, the identical as the earlier quarter and down only one million in contrast with a 12 months earlier, after two consecutive quarters of falling consumer numbers. In addition, Snap’s income rose 36 % to $390 million, whereas its internet loss narrowed to $192 million.
“Change is always difficult and this past year was no exception,” Evan Spiegel, Snap’s chief government, stated in ready remarks about the firm’s earnings.
The monetary report, which despatched Snap’s shares hovering greater than 20 % in after-hours buying and selling, follows months of turbulence for the firm. Since going public in 2017, Snap has been coping with rising competitors from Facebook, together with its core social community and its different apps, resembling Instagram and WhatsApp.
Last 12 months, Snap redesigned its app, successfully separating social and media into two sections. Its users soon revolted, with celebrities like Kylie Jenner criticizing the change. A long-awaited update to Snapchat’s Android app has also yet to be fully rolled out.
More recently, Snap has endured a wave of executive departures. The company said in January that its chief financial officer, Tim Stone, would leave, less than a year after he was hired last May. Imran Khan, Snap’s chief strategy officer, stepped down in September. That same month, the company lost Nick Bell, its vice president for content. Its head of hardware, Sahil Sharma, exited in December.
On top of this, Snap is under scrutiny from the Securities and Exchange Commission and the Justice Department. The company said late last year that it had responded to subpoenas from those agencies regarding disclosures it made ahead of its initial public offering.
In an earnings call on Tuesday, Mr. Spiegel said he planned to take time with the search for a new chief financial officer “and really get it right.”
He said Snapchat users on Apple devices were starting to return to the platform and daily active use had increased among those people. Snapchat’s Android app update is also gradually being introduced to a small set of users, allowing them to open the app 20 percent faster, he said. Mr. Spiegel estimated that there were roughly two billion Android users who do not use Snapchat — and that luring even a small percentage of them to the app would “make a real difference.”
Lara Sweet, Snap’s interim chief financial officer, said the company was “cautiously optimistic” that user numbers would not decline in the current quarter. In total, Snap said that it anticipated revenue of $285 million to $310 million during the current quarter.
Still, Snap remains small compared with Facebook’s photo-sharing app Instagram, which has been rapidly gaining new users. Facebook announced during its earnings call last week that Instagram had 500 million daily active users of Stories, a feature that lets people share photos and videos that have a life span of 24 hours. Snapchat had pioneered the Stories feature.
Wall Street analysts said they were relieved at Snap’s financial results.
“This was by far the most hated stock of all of the internet, by 10 miles,” Brent Thill, a managing director at Jefferies who follows tech companies, said of Snap. “What they did was a step in the right direction. They’re not out of this yet, but this is step one.”