Snapchat has finally made investor concerns disappear.
For the first time since going public in March, Snapchat’s parent company posted quarterly sales and user growth that beat Wall Street’s estimates.
The stock soared more than 20% in after hours trading Tuesday following the results. If the gains hold, Snap (SNAP)’s stock could top its IPO price of $17 a share for the first time since July.
Snap’s sales climbed to $286 million in the fourth quarter, up 72% from the same period a year earlier, as the company transitions to an automated ad sales auction similar to Google (GOOGL) and Facebook (FB).
The company also showed signs of accelerated user growth. It added 8.9 million daily active users in the final three months of the year, more than any other quarter of the year.
It accomplished both feats while losing less money than expected. Snap’s executives chalked it up in part to moderating headcount and not buying back employees’ shares during the quarter.
“Our business really came together toward the end of last year,” Evan Spiegel, the cofounder and CEO of Snap, said on a conference call with analysts Tuesday.
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SOURCE: CNN, Seth Fiegerman