CORRECTED - Snap's user growth, revenue beat analyst expectations, shares soar

CORRECTED - Snap's user growth, revenue beat analyst expectations, shares soar

CORRECTED - Snap's user growth, revenue beat analyst expectations, shares soar

Snap reported fourth-quarter results on Tuesday and said that its share-based pay jumped 27-fold from a year earlier to $181 million, with 72 percent tied to research and development.

The numbers on Tuesday may help lead Wall Street back to its original thesis on the company: that Snap, already popular with young people, has a lot of growth potential.

Snap shares closed the day up more than 1 percent to $14.06.

Investors, who had been expecting revenue of $255 million and a loss of 33 cents per share, sent the stock soaring on the strong earnings beat.

The company reported fourth-quarter results as Wall Street was looking for signs of life from an app that struggled at points past year.

SEE ALSO: Snapchat opens Snap Store in app.

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"Our work during 2017 is proof that we aren't afraid to make big changes for the long-term success of our business", Evan Spiegel, the cofounder and CEO of Snap, said in a statement.

Spiegel said the company has hired 2,400 employees over the past two years, an average of 100 each month.

The redesign has been rolled out to about 40 million users so far, according to Spiegel, with plans to expand it to all users by the end of the first quarter.

But while Snapchat may still be the go-to place for teens and college students to share photos and short videos with friends, the problem for Snap is that it's hard to monetize that content. "Compared to the old design, core metrics around content consumption and time spent in the redesigned application are disproportionately higher for users over the age of 35, which bodes well for increasing engagement among older users as we continue to grow our business".

Snap is now locked in a fight for its life with Facebook, which copied its marquee Stories feature - and the accompanying selfie filters and masks - and inserted them into all of its major products: Facebook, Instagram, WhatsApp and Messenger. Earnings per share came in at $0.13 compared to a significantly lower $-0.16.

Snap Inc said on Tuesday it added more users than expected to its Snapchat messaging app as it fights to fend off competition from Facebook Inc's Instagram, sending it shares up by almost 30 percent.

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