Snap shares drop more than 10% after it misses revenue expectations

• Snapchat parent company Snap reported its fourth-quarter results Tuesday.
• The company fell short of Wall Street's expectations with $561 million in revenue, while its net losses of $241 million were more than Wall Street had anticipated.
• Snap grew its platform to 218 million daily active users in the fourth quarter, its fourth consecutive quarter adding new users.
• After a tough 2018, Snapchat staged a comeback last year, but continues to face tough competition from Facebook, Instagram, TikTok, and Pinterest.
• Visit Business Insider's homepage for more stories.

Snap Inc.'s fourth-quarter earnings fell short of Wall Street's expectations, causing shares in the company to drop by more than 10% in after-hours trading as the company missed revenue estimates.

Snapchat's parent company announced its Q4 2019 earnings Tuesday evening, which included $561 million in revenue, a 44% year-over-year jump but less than than the $562 million analysts had predicted. Snap's adjusted earnings per share were $0.03, beating Wall Street expectations of $0.01.

Snap reported 218 million monthly active users for the fourth quarter, up from 215 million the previous quarter, which marks its fourth straight quarter adding new users. Its average revenue per user also climbed to

Snap also reported that its operating losses increased to $241 million, a 49% jump from the fourth quarter last year, thanks to $100 million in one-off legal charges related to a preliminary settlement agreement with the SEC surrounding its initial public offering.

"We saw momentum across the board as we grew our community, accelerated our revenue growth, and made progress towards profitability and free cash flow. We continued the momentum we developed early in the year through the fourth quarter," CEO Evan Spiegel said in prepared remarks.

After a poorly received 2018 redesign caused Snap's shares to fall, Snap made a comeback in 2019 thanks largely to its popular augmented reality filters. But the company continues to face tough competition from Facebook and its subsidiary Instagram, newcomer TikTok, and Pinterest, which passed Snapchat as the third-largest social media network last year, according to eMarketer.

Here's what the company reported and how that compared with what analysts were expecting and the company's prior year results:

• Q4 '19 revenue: $560.88 million. Analysts predicted $562.27 million. In the fourth quarter of 2018, Snap posted $389.8 million.
• Q4 '19 earnings per share (EPS): Earnings of $0.03 a share. Wall Street was expecting a loss of $0.12 a share. During the same period a year earlier, the company lost $0.14 a share.
• Q1 '20 revenue (guidance): Between $450 million and $470 million. Analysts predicted $463.35 million. In the first quarter last year, Snap saw revenues of $320 million.
• Q1 '20 earnings per share (forecast): The company didn't offer a per-share earnings forecast, but said it expected to post an adjusted loss before interest, taxes, depreciation, and amortization (adjusted EBITDA) of between $70 million and $90 million. Analysts were expecting adjusted EBITDA loss of $60.18 million in the period and a net loss of $0.06 a share. In the same period a year ago, the company lost $0.10 a share.

Snap's stock closed regular trading at $18.98 a share, up 17% on the day. The company's share price is up more than 170% over the last year, hitting a low of $6.70 and a high of $19.76 in that period.

Get the latest Snap stock price here.