Snap delivered a fourth quarter that was a bit of a shock as revenue came in higher than expectations.
The company, which has been a Wall Street punching bag since going public, reported a fourth quarter net loss of $349.98 million on revenue of $285.7 million, up 72 percent from a year ago. Daily active users were up 8.9 million, or 5 percent sequentially. On a non-GAAP basis, Snap lost 13 cents a share in the fourth quarter.
Wall Street was looking for a fourth quarter non-GAAP loss of 16 cents a share on revenue of $253.2 million.
For the year, Snap reported a net loss of $3.44 billion on revenue of $824.9 million.
Now those results don't scream financial juggernaut, but average revenue per user improved to $1.53 in the fourth quarter. On a conference call, Snap also sounded a bit more grown up and talked about moderating expense increases and noted cash burn fell 49 percent.
CEO Evan Spiegel said that improvements to its Android app paid off and its advertising platform improved. He said:
The retention rate of new Android users increased by nearly 20% when compared to last year, meaning that the people who try Snapchat on Android are much more likely to stick around and become daily active users. Additionally, the fourth quarter saw significantly more new Android users as a percentage of net additional users than any other quarter in our history.
Our growth on iOS continues. Our advertising business changed profoundly over the past year as we migrated the sale of our Snap Ads to an automated auction. Over 90% of Snap Ads were bought programmatically during Q4, which means that the auction transition for Snap Ads is largely behind us. We are learning a lot while operating our automated advertising platform, and we are constantly improving the way we sell and serve advertising. In Q4, our effective price per impression decreased by 25%, while our total advertising revenue grew 38% sequentially. More importantly, we increased advertising impressions by over 4x year-over-year while continuing to grow per user engagement.
Over the past 2 years, we hired over 2,400 people, roughly 100 new team members every month. While it was critical to build our team to keep pace with the growth of our business, it's become clear that we can now unlock substantially more productivity simply by changing the way that we work and by continuing to build an inclusive and creative culture.
Spiegel added that Snapchat plans to moderate hiring and make sure it builds the right team and cut operating expense growth.
Among other key earnings:
New Relic reported a third quarter net loss of $8 million, or 14 cents a share, on revenue of $91.8 million, up 35 percent from a year ago. Non-GAAP earnings for the third quarter came in at 5 cents a share. For its fiscal fourth quarter, New Relic said revenue will be between $95 million and $96.5 million with non-GAAP earnings of 4 cents a share to 5 cents a share.
For fiscal 2018, New Relic said it expects revenue between $351.6 million and $353.1 million, up 33 percent to 34 percent from the previous year. Non-GAAP loss for 2018 will be 4 cents to 6 cents a share.
The results and outlook were better-than-expected.
Extreme Networks reported a fiscal second quarter net loss of $31.9 million, or 28 cents a share, on revenue of $231.1 million, up 48 percent from a year ago. Non-GAAP earnings were 14 cents a share for the second quarter.
As for the outlook, Extreme Networks said that third quarter revenue will be between $262 million and $272 million with non-GAAP earnings between 17 cents a share and 24 cents a share.
Zendesk reported a fourth quarter net loss of $26.6 million, or 26 cents a share. On a non-GAAP basis, Zendesk reported a loss of a penny a share. Zendesk revenue was $123.4 million in the fourth quarter, up 39 percent from a year ago.