Snap's earnings show it isn't about to ghost us

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The poor report included slowing user growth and a revenue miss, and showed no clear path to profitability. Ever since the company behind Snapchat publicly unveiled paperwork with plans for a $20 billion IPO nearly exactly a year ago, concerns have surfaced about Snap's long-term viability.

That business is growing, and that's great news for Snap, which is about to make content from outside partners an even bigger part of its newly redesigned app.

Snap's first year as a public company hasn't been very good.

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Snap lost $350 million compared to $440 million last quarter as operating expenses grew to $261 million. In the year-ago quarter, Snap Inc (SNAP)'s revenue $165.7 million. Snap Inc (SNAP) management said the Q4 2017 result was the best quarter for user adds since Q3 2016. Daily active users grew by 8.9 million during the quarter to 187 million.

"Our business really came together towards the end of previous year and I am very proud of our team for working hard to deliver these results", said Snapchat CEO Evan Spiegel in prepared remarks to Tuesday's earnings call. This gave investors hope, as they thought that a big change in the app might give it the boost of energy required to regain the user growth rates it once enjoyed. A fresh design followed, and since then we've also heard that Stories will soon be available on the web. Analysts had expected Snap to report 184.2m users, according to FactSet. In the new version, users' Discover Stories and friends' stories will reportedly be separated, which means there will be fewer chances for curious users to click on publishers' content, which could further hurt Snap's advertising efforts.

Snap surprised Wall Street on Tuesday with a rebound in user growth for its Snapchat messaging app, showing resilience amid competition with Facebook's Instagram and sending shares up almost 30 percent. Finally, BlackRock Inc. increased its position in Snap by 10.0% during the second quarter. Following the sale, the chief executive officer now owns 86,657,812 shares in the company, valued at approximately $1,076,290,025.04. The Motley Fool has a disclosure policy.