The US company, Snap, gave a rosy forecast for user growth on its Snapchat video app, but said supply chain disruptions and inflation could continue to hurt demand for ads.
Snap shares fell by as much as 10 percent immediately after the results came out, but later cut losses as investors digested the conflicting results, according to Reuters.
Snap expected that the number of daily active users in the second quarter of this year will range between 343 and 345 million, higher than Wall Street estimates of 340 million.
However, the US company warned that inflation, labor shortages and other economic challenges could squeeze revenue.
“A large number of advertisers paused their advertising campaigns in the days following Russia’s military operation in Ukraine in late February,” Snap Chief Financial Officer Derek Andersen said in prepared remarks before the earnings call with analysts.
“While the majority of advertisers have resumed their campaigns, many remain concerned about inflation and persistent geopolitical risks,” he added.
Snapchat Warns That Inflation Could Hurt Revenue Growth
