SnapWall Street forecasts for profits and sales were disappointed and it predicted disappointing revenue growth during the current quarter. The company reported results in its first quarter on Thursday. However, daily usage grew by 18% per year, which was higher than what we expected.

In extended trading, the stock fell 6%

Below are some key numbers

• Earnings per shareBased on a survey conducted by Refinitiv among analysts, there was a 2 cent loss compared to expected earnings 1 cent.
• Revenue(1) $1.06 Billon versus $1.07 billion anticipated, as per Refinitiv
• Global Daily Active Users (DAUs),StreetAccount: Up 18% Year-Over-Year: 332 Million vs 330 Million Expected
• Average Revenue per User (ARPU(): 3.20 against $3.25 anticipated, StreetAccount reports, an increase of 16.8% year over year

Snap CEO Evan Spiegel stated in prepared remarks that “the first quarter 2022 was more difficult than we expected”.

Spiegel blamed Snap’s problems during the quarter partly on macroeconomic conditions. This included advertisers who stopped their campaigns following the Russian invasion in Ukraine.

Snap stated that it expects June quarter revenues to increase between 20% and 25%. This is lower than Wall Street’s 28% estimate. Snap projects daily users to be around 344 million, which is higher than the 341.4 million expected.

The company stated that it expects adjusted EBITDA in the second half to range between $50 million and breakeven.

Snap posted a 38% increase in overall revenues year-over-year during March’s quarter. However, Snap had a greater net loss and lower free cash flow annually.

Derek Andersen (Snap CFO) stated that additional conditions can impact advertising customers such as supply chain disruptions or labor shortages. Inflation and the effect of rising rates are also factors.

Andersen explained that Snap might continue to experience a difficult operating climate, leading customers to cut advertising budgets or stop their campaigns altogether.

Snap faces other challenges as a result of Apple’s 2021 privacy policy, which makes it difficult for advertisers to reach and measure iPhones. Andersen stated that 90% of direct response advertising revenues are now generated by the company through the solution it created.