The stock of Snap, parent company of photo-sharing app Snapchat, plummeted more than 11 per cent after the company posted results of its fourth quarter that failed to meet Wall Street expectations. The company's net loss increased to $241 million as revenue increased by 44 per cent to $561 million, falling short of analysts' expectations. Daily Active Users increased 17 per cent year-over-year to 218 million while fourth quarter operating cash flow improved 47 per cent year-over-year to $67 million in the quarter that ended on December 31, 2019.
Operating cash flow improved from $59 million to $67 million in Q4 2019, compared to the previous year. "We grew our community by 31 million daily active users, accelerated our revenue growth, and progressed towards profitability by improving full-year Adjusted EBITDA by 65 per cent year-over-year," said Snap CEO Evan Spiegel. "The strength in our core business gives us confidence in our long term growth and profitability and we're excited to build on these results in 2020 and beyond," he added.
Snap said it will continue to invest in its Discover platform, with a particular focus on building a sustainable content ecosystem and increasing engagement. Total daily time spent by Snapchatters watching Discover increased by 35 per cent year-over-year in Q4 2019 while total daily time spent by Snapchatters over the age of 25 watching Discover increased by 60 per cent. "Since their debut in November 2018, more than 125 million Snapchatters have watched Bitmoji Stories, our personalized comics starring Snapchatters and their friends," the company said. At the end of Q4 2019, over 735,000 Lenses had been created by Snapchat community through Lens Studio up from over 600,000 at the end of Q3 2019.
"Lenses made by our community via Lens Studio now make up over 20 per cent of the total Snaps sent every day with a Lens, with top-performing Community Lenses reaching billions of views on Snapchat, said the company. On New Year's Eve, more than 200 million people engaged with augmented reality on Snapchat over 13 billion times, up from 9 billion last year. For Q1 2020, Snapchat said its revenue is expected to be between $450 million and $470 million, compared to $320 million in Q1 2019.
( With inputs from IANS )