Snap shares soar on better-than-expected profit and revenue

Snap shares jumped in extended trading Tuesday after the company reported better-than-expected fourth-quarter results.

Here is how the company did compared with Wall Street's expectations:

Revenue for the fourth quarter increased 14% from $1.36 billion a year earlier. Net income in the quarter was $9.1 million, or a penny a share. In the prior year, Snap recorded a fourth-quarter net loss of $248 million, or 15 cents a share.

Snap said it expects first-quarter revenue to come in between $1.325 billion and $1.36 billion. The midpoint of that range is $1.34 billion, higher than Wall Street projections of $1.33 billion.

However, Snap's first-quarter adjusted earnings will fall in the range of $40 million to $75 million, below analyst expectations of $78.5 million. In an investor letter, Snap attributed the guidance to "investment plans for the quarter ahead."

First-quarter adjusted operating expenses will grow in the range of 11% to 12% year over year due to hiring, legal-related costs, and "a seasonal shift of marketing expenses into Q1 relative to the prior year," Snap said.

"As we look ahead to 2025, we see additional opportunities to invest productively in scaling our business given the foundational improvements we have made to our ad platform and the momentum we have established in our go to market initiatives," particularly in the segment focused on small and medium-sized businesses, Snap said in the letter. "Our investment plans for 2025 reflect this optimism, alongside a strong commitment to make further financial progress towards profitability as we scale."

Additionally, the company said it committed $5 million to "support communities and team members" affected by the recent Los Angeles wildfires and that it anticipates