Snap reported first-quarter results late Thursday that showed a small miss on the top and bottom lines. Snap stock initially fell in after-hours trading but later surged well into positive ground.
The social media company reported an adjusted loss of 2 cents a share on revenue of $1.06 billion. Analysts expected Snap to report a profit of 1 cent a share on revenue of $1.07 billion.
Snap stock jumped 5.2% to 30.95 during after-hours trading on the stock market today.
Revenue jumped 38% from the year-ago quarter. Daily active users climbed 18% to 332 million, meeting estimates. For the second quarter, Snap expects 343 million to 345 million users.
"The first quarter of 2022 proved more challenging than we had expected," Snap Chief Executive Evan Spiegel said in written remarks with the company's earnings release. "On the revenue side, forward looking visibility is as difficult today, or perhaps more difficult, than at any point in recent memory."
Snap Stock: Significant Work To Do
"While we are pleased with our progress given the macroeconomic environment, we also recognize that we have a significant amount of work to do to realize our long-term opportunity, and we believe we are well positioned to invest through the turbulence," Spiegel went on to say.
Spiegel said revenue growth in the first quarter initially exceeded their expectations, with year-over-year growth of about 44%.
"In the days immediately following Russia's invasion of Ukraine on Feb. 24, we observed that a large number of advertisers initially paused their campaigns," he said. "The vast majority of clients resumed their campaigns within 10 days following the invasion, and daily average revenue in March exceeded pre-invasion levels."
Advertisers Also Faced Challenges
"In the first quarter, advertisers in a wide variety of industry groups reported concerns related to the macro-operating environment, including continued supply chain disruptions, rising input costs, economic concerns due to rising interest rates, and concerns related to geopolitical risks stemming from the war in Ukraine," Spiegel added.
Advertising accounts for about 98% of Snap's revenue.
Snap calls itself a camera company. By downloading its Snapchat app to a smartphone, users have access to a wide range of features.
Its latest innovation lies in the cutting-edge field of augmented reality, which overlays digital images and other information into a person's field of view. Also, applications for the technology include navigation, education, games, commerce and more. In addition to entertaining users, augmented reality also serves as a revenue driver.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
