Snap Inc (NYSE:SNAP) reported a jump in quarterly revenue and users, sending its shares slightly above the price of its initial public offering for the first time in months.
Shares in the owner of the Snapchat app’s have had a poor performance since the company went public last year amid concerns about competition from Instagram.
READ: Snap shares tumble as insiders are unshackled from post-IPO lock-up
Its shares had fallen by half from the US$29.44 high reached after the IPO and have not traded above the US$17 IPO price since July 10.
In US pre-market trade, shares surged 21% to US$17.12 each after Snap reported results that beat expectations.
Revenue increased 72% to US$285.7mln in the quarter ended December 31 as daily active users rose 18% to 187 million, compared to a year ago.
Analysts were expecting revenue of US$253.2mln and daily active users of 184.2 million.
Better-than-expected loss
Snap posted a loss of US$350mln, or 28 US cents a share, compared to a loss of US$170mln, or 20 US cents a share, a year earlier.
Excluding items, the loss came to 13 US cents a year, exceeding analysts’ estimates of 16 US cents per share.
In an effort to lift revenue, Snap is shifting towards a self-serve ad buying software that operates as an auction in a similar way to rivals Facebook and Google.
Auction-based ads will allow Snap to increase the number of ads for sale. Clients bought 90% of the company’s inventory via this new tool during the latest quarter.
Snap also saw revenue from smaller businesses more than double from the third quarter to the fourth after previously having sold most of its ads to large brands.
Snapchat redesign
The company plans to lure in more users by redesigning Snapchat to make it easier to use and fixing software bugs.
“We believe that the redesign has also made our application simpler and easier to use, especially for older users,” chief executive Evan Spiegel said.
However, he said he expects revenue growth to slow in the current quarter compared with the fourth quarter.