Revenue for the December quarter reached $285.7 million, exceeding the analyst consensus forecasts of $252.95 million.
Snap lost $350 million compared to $440 million last quarter as operating expenses grew to $261 million.
Shares of the company jumped as much as 29 percent in extended trading following the results. The report, due out after the bell, will round out the Snapchat operator's rather bleak first year as a public company. But Spiegel was issued a stock award that vested immediately at the time of the IPO, representing 3 percent of all outstanding shares and delivered in "equal quarterly installments over three years beginning in the third full calendar quarter following this offering".
Another feather in Snap's cap: Average Revenue Per User, which came in well above the $1.36 ARPU analysts expected. That would also put Snap's yearly sales at $793 million, nearly double the $404 million it brought in in 2016. Snap has invested heavily in driving its ad business forward, buying a company that helps measure in-store foot traffic, and adding ad-serving tools for its clients. But the company's bet on Spectacles has been expensive, costing the company $40 million last quarter for "excess inventory". Vetr raised Snap from a "strong sell" rating to a "hold" rating and set a $16.13 target price for the company in a report on Friday, October 13th.
Snapchat paid its publishing partners "more than $100 million" in revenue-sharing advertising deals previous year, up from $58 million in 2016 and just $10 million in 2015, the company reported on Tuesday. The company has demonstrated meteoric growth in users since 2014, quadrupling its user base since January 2014 from 46 million to 187 million.
In Facebook's earnings call last week, Facebook CEO Mark Zuckerberg called WhatsApp and Instagram the two most-used Stories products in the world, and said, "Stories are on track to overtake posts in feed as the most common way that people share across all social apps".
Those design changes have put a bigger emphasis on user-to-user sharing, as opposed to content created by publishers and brands.
Further, the company is not profitable and its advertising business has not yet matured.