Snapchat revenue surges 72 percent, optimistic it can compete with Instagram

Snapchat saw a 72 percent increase in revenue for October-December 2017 period of $285.7 million, exceeding analysts’estimation ($253.2 million).

The instant messaging application also reported a surge in its users, reaching 187 million in the quarter. The figure beat an initial forecast of 184.2 million, according to Reuters report Wednesday.

The company’s daily active users grew 18 percent from the previous year, overturning trend of stagnant growth. Investors hope the increase in daily users can boost its advertising revenue.

Also, the performance growth is expected to support the company’s effort to compete with Instagram, owned by Facebook . According to The Street writer Eric Jhonsa, Snap’s photo/messaging service is still facing a fierce competition from Instagram Stories and Whatsapp Status. Both now have more than 300 million daily active users. The trend saw an increase in the usage of Facebook Stories after it supports Instagram Stories cross-posting.

Snaps shares traded at $17.61 in Wednesday’s pre-market, up 25 percent since June.

A simpler app and a new store

Snapchat is planning to launch its brand new version in the first quarter of 2018. According to Chief Executive Evan Spiegel, the new design will make the app user-friendly for older users.

Snap Inc.just opened a new target='_blank'>merchandise store. The aim is not to earn money yet. But the company wants to prove the existence of the brand.

Users can buy stuff such as T-shirts and dolls. The store is expected to show the company’s potential in creating e-commerce in its app. No official comment from a Snapchat spokesperson so far.

One day, the store can be a source of revenue for the Venice, California-based tech firm. Snapchat previously sold a few products such as Dancing Hot Dog Halloween Costume on Amazon .

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