By Sheila Dang

(Reuters). Despite reporting better-than-expected user growth in the first quarter, Snap Inc missed revenue forecasts. Snapchat’s parent company said that disruptions to supply chains and the invasion by Ukraine have hurt advertising demand.

Snap’s shares fell 10% during trading following the bell.

Company warned of inflation and potential labor shortages, and forecasted that its second-quarter revenue growth rate could suffer.

Snap projects second quarter revenue growth of 20% to 25% over last year. So far, the quarter’s growth rate has been 30 percent.

Santa Monica-based firm, headquartered in California, is the first to report its first quarter earnings. The results could be a threat to Meta Platforms Inc, owner of Facebook (NASDAQ:). Twitter Inc (NYSE:) The company also makes revenue from digital advertising sales and will release results next week.

Snap Chief Financial Officer Derek Andersen said that many advertisers had halted their ads in the days after Russia invaded Ukraine in February. This was in prepared remarks made before the earnings call.

He said that while most advertisers had resumed campaigns, some were still concerned about inflation, and continued geopolitical risk.

1.06 billion was the revenue for the quarter that ended on March 31, which is 38% more than the quarter prior. Analyst expectations were $1.07 billion lower than the actual figure, according to Refinitiv IBES data.

Snapchat daily active users rose 18% over the past year to 332 million. This is higher than consensus estimates of 329.7 million.

Snap projects that Snap will forecast the second-quarter active users between 343 and 345 millions.