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Axios Visuals

Snap Inc. beat on earnings and revenue Tuesday, surprising Wall Street investors that had modest expectations for the camera company. It also saw an increase in user growth after posting slowed growth over the past four quarters.

Why it matters: Snapchat faced a difficult first year as a public company, missing growth expectations as it faced competition from Instagram and Facebook. Tuesday's success, as seen by Snap's stock gains, is reviving investor confidence in the company.

  • Revenue: $285.7 vs. expected $252.8 million by Bloomberg.
  • Earnings per share: $0.13 vs. expected $0.16 by Bloomberg.
  • Daily active Users (DAU): 187 million vs 184 expected by TheStreet
  • Average revenue per user (ARPU): Up $1.57 vs. $1.36 forecast

The company announced last quarter that it would be rolling out a redesigned version of the app in December, but many users reportedly have not seen any changes to their Snapchat apps yet.

  • Executives told investors that they hoped a redesign would drive user growth, which it did, per last quarter's earnings announcement.
  • The company announced 187 million average DAU — up 8.9 million from last quarter — and the highest number of quarterly net adds since the third quarter of 2016.
  • "Our work during 2017 is proof that we aren’t afraid to make big changes for the long-term success of our business," Snapchat CEO Evan Spiegel said in a pre-earnings call statement.

The company sold 90% of ads programmatically last quarter, up from 60% the previous quarter, Spiegel noted in the statement.

  • Programmatic growth is reflective of the company's improvements in ad technology to capture more small and medium-sized business advertising — something Facebook and Instagram do well.
  • It also seems to have finally figured out how to make a business out of its users outside of North America and Europe: Q4 revenue hit $26 million, double the previous quarter and up from $6 million a year ago. ARPU hit $0.56, up from $0.30 in Q3 and $0.15 a year ago.

Not as great:

  • Expecting Spectacles, which brought in $8 million in revenue in Q1 2017, to be substantially down year-over-year and sequentially.
  • "In Q1, we are planning for our year-over-year revenue growth rate to moderate from the Q4 pace," according to CFO Drew Vollero's prepared remarks. "The majority of our revenue is generated through brand advertising, which seasonally peaks in the fourth quarter."
  • The company is planning for a slight increase in capital expenditure in 2018 as its moving many of its headquarter teams to leased facilities during the first half of the year, and expect more moves later in the year and into 2019.

Go deeper

33 mins ago - Sports

Jill Biden cheers on Team USA at Tokyo Olympics

Jill Biden congratulates U.S. women 3x3 basketball team after the first round 3x3 basketball match. Photo: Mustafa Yalcin/Anadolu Agency via Getty Images

First lady Jill Biden attended three Olympic events on Saturday and hosted a watch party at the U.S. Embassy for the Team USA-Mexico softball game.

Driving the news: On her first day as a spectator at the Games, Biden attended a women's 3x3 basketball game, cheered on American swimmers during preliminary heats and caught the second half of the U.S. women's soccer game against New Zealand.

42 mins ago - Sports

Team USA closes out Day 1 of Summer Olympics with no medals

Eli Dershwitz of Team United States reacts in his men’s sabre individual bout against Junghwan Kim of Korea of the fencing on day one of the Tokyo 2020 Olympic Games. Photo: Elsa / Getty Images

Team USA concluded the first official day of competition at the Tokyo Olympics on Saturday without winning a single medal despite several close contests.

Why it matters: Olympic historian Bill Mallon noted that this was the first time the United States did not receive any medals on Day 1 of the Summer Olympics since Munich in 1972.

G20 coal impasse previews fraught UN climate summit

A man tends to vegetables in a field as emissions rise from nearby cooling towers of a coal-fired power station in Tongling, Anhui province, China, Jan. 16, 2019. (Qilai Shen/Bloomberg via Getty Images)

G20 environment ministers ended talks without agreeing to phase out domestic coal-fired power generation and funding for such plants abroad, a deadlock that foreshadows difficult negotiations looming for this fall's critical climate summit.

Driving the news: Officials who met in Naples, Italy, on Thursday and Friday could not find consensus language on the use and financing of the most carbon-emitting fuel.