The number of Snapchat users has stabilised after two quarters of decline according to its parent company’s latest results. Snap said the platform had 186 million daily active users in the three months to 31 December.
The number is unchanged from the previous quarter but analysts had expected users to fall.
Revenues also rose by more than expected and Snap’s pre-tax losses narrowed for the period. Snap’s share price surged as much as 15% in after-hours trading before settling at $7.04. Fourth quarter revenue rose by 36% to $389.8m and pre-tax losses narrowed to $191.7m from $350m in the comparable period. However, its shares are far below the $17 offer price when it floated on the New York Stock Exchange in March 2017.
Snap, which started in 2012, is known for its appeal to younger users.
It was once viewed as one of the most promising names in technology, but investors had soured on its prospects after a series of company stumbles, including a redesign that alienated some users.
Last year, the number of daily active users fell to 186 million from a peak of 191 million in the first quarter.
On Tuesday, Snap said it was “cautiously optimistic” that its user count would hold steady in coming monthsSnap’s chief executive Evan Spiegel also defended the redesign, saying it had positioned the company for future growth.
He said it would allow the firm to expand the kind of content it offers users, while retaining its emphasis on communication between friends.
For the full year, Snap’s revenue rose by 43% to $1.1bn marginally below pre-tax losses of $1.2bn which fell from $3.4bn in the previous period. Mr Spiegel said the company was getting “substantially closer” to profitability.
“We are proud of the progress we have made as we enter 2019 focused on growing our business and driving towards profitability,” he said.