Snapchat parent shares soar on first quarterly profit

SAN FRANCISCO, United States - Shares in Snap soared on Thursday after the firm behind image-centric, ephemeral messaging app Snapchat reported its first-ever quarter profit.

Shares that had been dragged down by worries about the broader market and concerns about tightened iPhone privacy making it tougher to target ads launched nearly 60 percent on earnings that beat expectations.

Snap ended last year with a loss trimmed to $488 million, and posted a net income of $22.5 million in the final three months of the year.

"2021 was an exciting year for Snap and we made significant progress growing our business and serving our global community," chief executive Evan Spiegel said in an earnings release.

He added that strength in Snap's core business has allowed it to invest in augmented reality, "transforming the way that the Snapchat community experiences the world through our camera."

Snapchat became a hit, particularly with young smartphone users, by letting people share moments in the form of photos or videos in messages that self-destruct after being viewed.

Popular features in the app included "lenses" that allow people to overlay special effects on pictures.

Snap has since redefined itself as a "camera company," launching Spectacles sunglasses that have built in cameras and synch to smartphones.

Snap revenue for the recently ended quarter was $1.3 billion, a 42 percent increase from the same period a year earlier.

"Snapchat ended 2021 on a high note, exceeding our expectations for ad revenue," said Insider Intelligence principal analyst Jasmine Enberg.

"Snapchat is clearly not as prone to the 'TikTok effect' as Meta, with strong daily active user growth in all regions."

Competition from short-form video sharing sensation TikTok helped bruise Facebook-parent Meta, which saw its ranks of daily users shrink for the first time in the final three months of last year.

While Snap earnings felt the sting of supply chain woes and changes to iPhone operating software that make it tougher to target online ads, it was "buoyed by banner quarters" earlier quarters in the year, according to Enberg.

The California-based company says at its website that Snapchat is used daily by an average of 319 million people.

Snap revenue for 2021 was $4.1 billion, up 64 percent from the previous year, according to its earnings report.

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