Snap had earlier warned its peak advertising demand period between Black Friday and the December holidays had one fewer week this year.
Snap said daily active users (DAU) on Snapchat rose 4 percent to 218 million
Snap missed Wall Street estimates for fourth-quarter revenue on Tuesday as it faced tough competition from digital advertising giants Google and Facebook, sending its shares down 10 percent.
Snap, which owns the popular photo messaging app Snapchat, had earlier warned its peak advertising demand period between Black Friday and the December holidays had one fewer week this year.
Revenue, which the company generates from selling advertising on Snapchat, rose 44 percent to $560.88 million but missed the average analyst estimate of $563.03 million.
While Snap has invested in a self-serve platform to make it easier for advertisers to buy ad space, it is still a long way from stealing ad dollars from Alphabet's Google and Facebook, which command a huge portion of the digital advertising market.
Snapchat has only 0.5 percent of worldwide digital ad revenue, while Facebook accounts for 21.1 percent, according to a report by market researcher eMarketer.
Snap said daily active users (DAU) on Snapchat rose 4 percent to 218 million in the three months ended December 31 from the prior quarter.
The user metric stood at 186 million a year earlier.
Snapchat rose to fame with its photo lens filters that can overlay things like dog ears on a user's face and has added mobile games and original shows to keep its audience on the app.
Snapchat's DAU, a widely watched metric by investors and advertisers, was above analysts' average estimate of 215.04 million, according to IBES data from Refinitiv.
Average revenue per user jumped 23 percent to $2.58 during the quarter from a year earlier.
Snap is focusing on growing the total number of advertisers on Snapchat as well as diversifying the types of advertisers it works with, said Jeremi Gorman, Snap's chief business officer, on an earnings call with analysts.
Snap's net loss widened to $240.7 million, or 17 cents per share, from $191.67 million, or 14 cents per share, a year earlier.
The company expects first-quarter revenue in the range of $450 million to $470 million. Analysts on average were expecting $461.6 million.
"Given the substantial long-term opportunities ahead, we are working hard to scale our revenue so that we are able to self-fund our investments in the future," Chief Executive Officer Evan Spiegel said during the call.
Shares of Snap were down 10 percent to $17.09 in trading after the bell.
© Thomson Reuters 2019
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