Snap's user growth, revenue beat analyst expectations

(Reuters) - Snap Inc (SNAP.N) said on Tuesday it added more users than expected to its Snapchat messaging app as it fights to fend off competition from Facebook Inc’s (FB.O) Instagram.

Snapchat’s daily active users rose to 187 million in the quarter ended Dec. 31 from 178 million in the third quarter, beating analysts’ average expectation of 184.2 million users, according to financial data and analytics firm FactSet.

Daily active users rose 18 percent from a year earlier, reversing a trend of slowing growth. The figure is closely watched by investors who hope user growth can be translated into advertising revenue.

The Venice, California-based company posted a net loss of $350 million, or 28 cents per share, down from a loss of $170 million, or 20 cents per share, a year earlier. It was Snap’s fourth quarterly earnings as a public company.

Revenue rose 72 percent year-over-year to $285.7 million. Revenue per user rose 46 percent from a year earlier to $1.53, while cost of revenue per user rose 5 percent to $1.02.

Analysts and investors have been watching to see if Snap can boost user growth amid competition from larger rival Instagram, which has added photo filters and other Snapchat-like features.

Chief Executive Evan Spiegel said the company benefited from a transition of its ad business to an auction model and from improvements to the version of Snapchat that runs on Android phones, among other changes.

“We executed well on our 2017 plan to improve quality, performance, and automation, which removed friction from our advertising business and improved our application for the Snapchat community,” Spiegel said in remarks prepared for a conference call with analysts.