Snap Inc. forecasted a bright future for user growth on its Snapchat app on Thursday, but warned that supply-chain interruptions and inflation might continue to harm ad demand.
Snap’s stock dropped as much as 10% following the announcement, but eventually recovered as investors analysed the mixed data.
Snap expects 343 million to 345 million daily active users in the second quarter, up from 340 million predicted by Wall Street.
Inflation, labour shortages, and other economic issues, however, might put a strain on income, according to the corporation. It predicted sales increase of 20% to 25% over the previous year in the second quarter. So far in the current quarter, the growth rate has been 30%.
The Santa Monica, California-based firm is the first of the major internet applications to disclose first-quarter earnings, and the findings might throw a pall over Facebook owner Meta Platforms Inc and Twitter Inc, both of which make money from digital advertising and will post results next week.
The company’s revenue for the first quarter ending March 31 was $1.06 billion, up 38 percent over the previous period. According to Refinitiv’s IBES statistics, the number fell short of analyst projections of $1.07 billion.
Snapchat’s daily active users increased 18% year over year to 332 million, exceeding consensus projections of 329.7 million.
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