Snap's shares rocketed 45% in premarket trading Friday after the company reported an unexpected quarterly profit at a time when many expected it to be hurt by Apple's new privacy guidelines.
Revenue increased 42% to $1.3 billion, resulting in a net profit of $23 million, the first since the company went public in March 2018.
The announcement by Meta Platforms of its first-ever quarterly loss of members has dragged on the equities of social media platforms like Snap and Pinterest. Changes to Apple's privacy laws, which have made it more difficult for apps to follow users and offer targeted adverts, are to blame for the company's poor performance.
Many people wondered if the changes would affect the entire industry. Snap, on the other hand, expanded its subscriber number and, on average, received more money from each user. Snap ended the year with 319 million daily active users, up 13 million from the previous quarter. During the same time period, the average revenue per user increased by 18%. In addition, the company had a positive free cash flow in the quarter.
On an adjusted basis, the company now expects current-quarter revenue to be about $1.06 billion, with a likely breakeven at an operational level, which would be the third time in a row.