CNN recently reported that Snapchat has just posted a profitable quarter, which translated into a 20 percent hike in its stock price. Snapchat has been a public company since last March, and this marks the first occasion that the company was able to exceed Wall Street’s projections for its quarterly sales growth. Its user base continues to expand at a rate much higher than anticipated for the start of the year.
There were about 8.9 million additional daily active Snapchat users signing on at the end of 2017. Evan Spiegel, Snapchat CEO and co-founder, explained that Snapchat was truly on a winning streak by the end of 2017, and he anticipates that this jump in growth will continue through the new year. There were many business practices that came together for Snapchat at a remarkable rate last year, which has made the company more efficient and productive.
One of the major contributing factors to Snapchat’s growth in users was the release of the redesign of the app in November of 2017. The change was designed to streamline users’ experience with the app, which also allowed for older users to more readily embrace this form of social media. Snapchat previously suffered from a reputation of being a social media app only used by young people, and the app had trouble expanding its user base beyond the initial batch of younger people who signed up years ago. This new redesign was part of a larger campaign to make the app appear more accessible to users of all ages and backgrounds.
The Snapchat redesign has only been rolled out to 40 million accounts so far, which means that there is still potential for it to reach and attract even more new users. With more than 187 million current users, Snapchat certainly has a long way to go in terms of capturing the complete market on social media users. In comparison, Instagram Stories currently boasts more than 300 million users, which is even more impressive considering the fact that Snapchat has been around for much longer.
Although there is plenty of celebrating going on right now among Snapchat executives, the company is still about $175 million below the sales mark that it was expected to hit by the end of 2017. Its recent growth is promising, but the company’s overall performance is still down from where it was expected to be at this point when it went public.