Much of Snap’s growth, according to Insider Intelligence analyst Jasmine Enberg, may have come from India, where TikTok is prohibited.
Investors are lining up to buy Snap stock after the company’s owner, the vanishing messaging network Snapchat, stunned Wall Street by reporting a quarterly profit for the first time. The stock surge came after Meta, the parent company of Facebook, experienced its best one-day stock price loss in history on Thursday, demonstrating that, while internet and social media businesses are generally bundled together by Wall Street, their fortunes sometimes diverge.
In after-hours trading, Snap shares were up $14.30 (approximately Rs. 1,000), or 58 percent, to $38.89 (about Rs. 2,900). Following Meta’s plummet, the notoriously volatile stock dropped over 24% in regular trade.
Snap reported earnings for the fourth quarter Thursday, beating analyst estimates on earnings, revenue, and user growth. The report marks Snap’s first profitable quarter on a net income basis as a public company. It released a day after Facebook parent Meta delivered disappointing guidance for the first quarter
“With strong daily active user growth in all regions, including North America,” noted Insider Intelligence analyst Jasmine Enberg, “Snapchat is not as prone to the ‘TikTok effect’ as Meta.” She alluded to Facebook’s slowing user growth, which she attributed in part to competition from TikTok, a popular video-sharing app.
Nonetheless, the majority of Snap’s growth, according to Enberg, comes from India, where TikTok is illegal.
Snap, based in Santa Monica, California, reported a profit of $22.6 million (approximately Rs. 170 crores), or 1 cent (about 75 paise) per share, compared to a loss of $69 million (nearly Rs. 500 crores), or 8 cents (roughly Rs. 6) per share a year ago. According to FactSet, analysts expected it to lose 9 cents (approximately Rs. 7) per share in the most recent quarter.
Revenue increased by 42% to $1.3 billion (roughly Rs. 9,716 crore). Snap’s average daily user count also increased in the fourth quarter, rising 20% year over year to 319 million.
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