Investors in Snap Inc (NYSE:SNAP) endured a roller-coaster 24-hours after the parent company of Snapchat reported a mixed bag of results.
Snap slumped to a first-quarter net loss of US$359.6mln compared to net income of US$287mln in the previous quarter as new privacy rules imposed by Apple Inc (NASDAQ:AAPL) hit its advertising business.
And the group cautioned second-quarter revenue could come under pressure from rising inflation, labour shortages and other economic factors.
Revenue for the first quarter, however, did increase 38% to US$1.06bn - inline with previous guidance of US$1.03bn to US$1.08bn.
"The first quarter of 2022 proved more challenging than we had expected,” Snap CEO Evan Spiegel said in a statement, CNBC reported.
Spiegel blamed Snap's performance on macroeconomic conditions, with some advertisers pausing campaigns in the wake of Russia's invasion of Ukraine.
Additionally, Snap was faced with Apple's 2021 privacy changes, which made targeting and measuring ads on iPhones more difficult.
Derek Anderson, Snap CFO, attributed the loss to a "$100mln year-over-year decline in other income, driven primarily by a US$92mln unrealised loss on an investment that became public in the second half of 2021."
The company now forecasts second-quarter revenue growth between 20-25% over the previous year. Growth has been 30% so far in the second-quarter.
The California-based company is the first of the major tech companies to report first-quarter earnings, and its results could cast a shadow over Meta Platforms Inc (NASDAQ:FB) and Twitter Inc (NYSE:TWTR), which also generate revenue from selling digital advertising, and will report results next week.
The number of daily active users reached 332mln, up from 319mln to close 2021. Spotlight, a Snapchat competitor to TikTok, also saw an increase in submissions, but the company did not disclose figures on the number of users.
After Snap's earnings were announced, the stock fell as much as 10% before see-sawing throughout the session.
Shares closed in New York at US$29.42, down 4.36% on April 21.