Snap Stock Had Its Best Day Ever. It Doesn’t Have All of Facebook’s Problems.

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Snap

stock rocketed higher Friday after the Snapchat parent reported a surprise profit for the fourth quarter. The results indicated that fears about Snap’s business in the wake of

Meta Platforms

‘ dismal report were overblown.

Snap (ticker: SNAP) jumped 58% to $38.91, the stock’s largest percentage increase since the company went public in 2017.

Snap reported net income of $22.6 million, or 1 cent per share. Revenue rose 42% year over year to $1.3 billion. Analysts polled by FactSet had forecast a net loss of 9 cents a share and revenue of $1.2 billion.

The company said daily active users grew 20% year over year during the quarter to 319 million, ahead of Wall Street estimates for 316.9 million, according to FactSet.

For the first quarter, Snap forecasts revenue between $1.03 billion and $1.08 billion. Analysts had forecast first-quarter revenue of $1.01 billion, according to FactSet.

The stock had closed down 24% on Thursday after investors panicked following the weak outlook from

Facebook

‘s parent Meta Platforms (FB). Meta’s fourth-quarter report and outlook slammed social media stocks broadly, since they signaled near-term weakness in the digital ad market.

“2021 was an exciting year for Snap and we made significant progress growing our business and serving our global community,” Snap CEO Evan Spiegel said in the earnings release. “The strength of our core business has enabled us to accelerate our investments in augmented reality, transforming the way that the Snapchat community experiences the world through our camera.”

Through Thursday’s close, Snap stock was down 58% over the last 12 months. Shares fell in October as investors wisened up to the challenges the social media firm has faced since

Apple

made key iOS changes last year. Apps on Apple devices must now ask users to opt in to advertisement tracking, a privacy practice that has made it difficult for apps like Snap that offer personalized ads.

Write to Connor Smith at [email protected]