Snapchat gains 11 million users but is still in the red

The photo and video app Snapchat continues to gain users, but can't make a profit, according to figures released on Tuesday.

Over the past three months, the number of daily active users worldwide rose by 11 million, or nine per cent, to 443 million, the company said. However, in the lucrative US market, it has stagnated at 100 million a year.

Snapchat's parent company, Snap, is struggling to turn user activity into profits. Third quarter revenue increased by an annual 15 per cent to $US1.37 billion ($A2.09 billion), which was slightly above analysts' expectations.

But the company still lost some $US153 million. This was a 58 per cent improvement compared to the nearly $US368.3 million a year ago. Snap's business is mainly based on advertising on the Snapchat app.

For the current quarter, which includes the Christmas season, Snap indicated revenues between $US1.51 billion and $US1.56 billion.

Analysts had expected a forecast at the upper end of this range. Following the announcement of a share buyback amounting to around $US500 million, the stock rose by about seven per cent in after-hours trading.