Snap Inc missed estimates for fourth quarter revenue on Tuesday as it faced tough competition from digital advertising giants Google and Facebook.
Snap, which owns the popular photo messaging app Snapchat, had earlier warned its peak advertising demand period, which runs between the Black Friday and December holidays, had one fewer week.
Revenue, which the company generates from selling advertising on Snapchat, rose 44% to $560.88 million.
Snapchat has only 0.5% of worldwide digital ad revenue, while Facebook accounts for 21.1%, according to a report by market researcher eMarketer.
Snap said daily active users (DAU) on Snapchat rose 4% to 218 million in the three months ended Dec. 31, from the prior quarter.
Average revenue per user jumped 23% to $2.58 during the quarter from a year earlier.
Besides the Android improvements, the company has been drawing more users in with creative photo tools, such as filters that manipulate the age of your face on a sliding scale.
“In 2019 we saw momentum across the board. We grew our community by 31 million daily active users, accelerated our revenue growth, and progressed towards profitability by improving full-year Adjusted EBITDA by 65% year-over-year,” said Evan Spiegel, CEO. “The strength in our core business gives us confidence in our long term growth and profitability and we’re excited to build on these results in 2020 and beyond.”
“We are working hard to scale our revenue so that we are able to self-fund our investments in the future,” Spiegel said in prepared remarks to investors.
Snap’s net loss widened to $240.7 million, from $191.67 million a year earlier.
The company expects first-quarter revenue in the range of $450 million to $470 million.