Snap soars 50% after posting its first-ever profitable quarter and recovering from Apple's privacy changes

• Snap soared 50% in regular trading Friday after crushing Q4 estimates.
• In delivering its first profitable quarter, the company said it recovered from Apple's privacy changes faster than expected.

Snapchat parent Snap soared 50% in regular trading Friday after delivering its first quarterly profit in which it said it had recovered from Apple's privacy restrictions faster than expected.

The instant-messaging app provider delivered fourth-quarter results on Thursday that crushed analyst estimates. Earnings per share came in at 22 cents on revenue of $1.3 billion, above the average expectation of 10 cents on revenue of $1.2 billion. Daily active users rose 20% year-on-year to 319 million, beating estimates of 316.5 million.

Snap's results came after Meta posted a disappointing quarter that missed estimates and in which the number of daily users fell for the first time on record, which slashed as much as 26% off its stock on Thursday.

The Facebook parent blamed Apple's iOS updates from last year for significantly impacting its advertising business. Apple rolled out changes to its operating system in April that allows users to opt-out of being tracked by brands, a change that eats into business models of ad-reliant platforms like Facebook.

But Snap CFO Derek Anderson said that because it's intentionally built privacy by design into its products, the iOS restrictions are "likely to be experienced differently for our business than perhaps for others."

A large chunk of Snap's advertisers began to use new ad measurements by the end of the fourth quarter and parts of its business recovered quicker than anticipated, he said.

Still, Snap expects to "take at least a couple more quarters for our advertising partners to build full confidence in our new measurement solutions."

What also may have worked better for Snap, in contrast to Meta, is that it has star appeal for young social media fans, according to Susannah Streeter, markets analyst at Hargreaves Lansdown. Not only did it add 13 million more daily active users, it crucially delivered a profit for the first time, she said.

"Just like any social arena, young people don't often want to be seen hanging out with their parents, which is why the lure of Snap and TikTok over Facebook or Instagram is so strong," she said.

Snap had soared over 60% in Friday's pre-market session.

"The 60% surge in the share price in after-hours trading reflects the optimism, that this won't be a flash in the pan result, but the start of sustained progress in user growth and profits," she added.

Snap forecast first-quarter revenue in the range of $1.03 billion to $1.08 billion, higher than the $1.02 billion estimate of analysts polled by Refinitiv. Daily active users are expected to come in between 328 million and 330 million in the first quarter, more than the average estimate of 327.8 million.

Snap had tumbled 23.6% on Thursday before delivering its own earnings, following Meta's poor results that rattled other social media stocks too. But it rose as much as 62% in after-hours once it had released its quarterly update.

After the bell on Thursday, solid earnings from Amazon also boosted tech shares and set the stage for a relief rally at the end of a tumultuous week.

Snap was last up 46.5% at $35.94 a share on Friday as of 9:48 ET.

Read more: Should you buy the Meta dip? 4 experts weigh-in on whether this is a chance to grab shares in the tech giant at a bargain price or to run for the hills as TiKTok takes over