Snap, the owner of the Snapchat app, reported revenues for the fourth quarter up 36 percent year-on-year to USD 390 million, better than the company's guidance. Its gross margin improved sharply to 45 percent, and the operating loss narrowed to USD 195 million. The adjusted EBITDA loss reduced to USD 50 million from USD 159 million a year ago, also better than expected, and the net loss was USD 192 million, compared to a loss of USD 350 million in Q4 2017.
For the first quarter, Snap forecast revenues of USD 285-310 million, down on a sequential basis due to seasonal effects, and an EBITDA loss of USD 140-165 million. However, Snap's management said it was "cautiously optimistic" and does not expect a sequential decline in daily active users in Q1.
In Q4, the predicted drop in users did not materialise, and daily active users were flat on a quarterly basis at 186 million. That's still down from a peak of 191 million in Q1 2018. In North America, numbers were stable at 79 million, while Europe grew by 1 million to 60 million, and the rest of the world was unchanged at 47 million daily users. Average revenue per user jumped to USD 2.09 from USD 1.60 in Q3, with growth in all regions. ARPU was highest in North America, at USD 3.38, followed by Europe with USD 1.04 and the rest of the world at USD 1.24.
Operating cash flow showed a strong improvement, but remained negative, at an outflow of USD 126 million. In total, the company's liquidity by USD 136 million to USD 1.28 billion.
