Snap Inc. shares jumped more than 10% in after-hours trading Tuesday after the company added more users than expected, but the stock gave back most of those gains through the afternoon.
Snap SNAP, +3.99% shares were recently up less than 2% in after-hours trading. The stock typically experiences big swings after earnings, moving by double-digit percentages following seven of the company’s first eight quarterly reports as a public company. Snap has gained 118% so far this year, while the S&P 500 SPX, +0.88% has risen 17%.
The Snapchat parent company added 4 million users to the app in the quarter, bringing its total count up to 190 million — the first time in a year that the company grew its daily-active-user count sequentially. Analysts had been modeling 2 million net additions, and Snap publicly fought one prediction that it would lose users overall this year.
The company began to roll out its redesigned Android app during the first quarter, addressing a key issue that was thought to be holding back user growth and engagement, especially in emerging markets. Chief Executive Evan Spiegel stressed that the new app works on lesser smartphones with slower connections.
“Compared to the prior version, it is 25% smaller, opens 20% faster on average, and is modularized to allow for efficient ongoing innovation,” Spiegel said of the new Android app. “On some of the lowest-performing devices, this resulted in a 6% increase in the number of people sending Snaps within the first week of upgrading to the new Android build.”
Snap will need a boost to turn around sharply deteriorating revenue-per-user numbers outside the U.S. Snap’s average revenue per user grew by record lows overseas in the first quarter — 47% in Europe, from 57% in December and 120% a year ago, and 68% in the rest of the world, the first time that growth rate has fallen below triple-digit percentages in Snap’s public history.
The company reported a first-quarter net loss of $310 million, or 23 cents a share, compared with a net loss of $386 million, or 30 cents a share, in the year-earlier quarter. Snap’s adjusted loss per share for the period was 10 cents; analysts surveyed by FactSet had predicted 12 cents on average. A year ago, Snap reported a 17-cent loss per share.
Revenue for Snap rose to $320 million from $230.7 million a year prior. Snap’s revenue came in above the FactSet consensus, which called for $305.7 million. For the current quarter, Snap projects $335 million to $360 million in revenue, whereas analysts had been modeling $346 million.
Staff writer Jeremy C. Owens contributed to this article.