Snap has reported first-quarter revenue of $1.36 billion, surpassing analysts’ expectations of $1.35 billion according to LSEG data. 

Daily active users reached 460 million, slightly above the expected 459 million, while the average revenue per user stood at $2.96, exceeding the projected $2.93. The company’s adjusted EBITDA totaled $108 million, significantly outperforming StreetAccount’s estimate of $64 million.

The company also posted a net loss of $140 million, or 8 cents per share, slightly better than the $305 million loss it incurred in the previous year.

Economic Concerns Prompt Guidance Withdrawal

However, CNBC reported on April 29 that Snap’s shares dropped 13% in after-hours trading as the company declined to provide second-quarter guidance, citing uncertainties about “how macroeconomic conditions may evolve in the months ahead, and how this may impact advertising demand more broadly.” Analysts had anticipated revenue guidance of $1.39 billion.

“While our topline revenue has continued to grow, we have experienced headwinds to start the current quarter,” the company stated in its investor letter, noting it must “balance our level of investment with realized revenue growth.”

Ad Business Faces Mixed Results

Snap’s advertising revenues increased 9% year-over-year to $1.21 billion, driven primarily by direct-response advertising. However, brand-oriented advertising revenue declined 3% compared to the previous year.

CFO Derek Andersen revealed that some advertisers report impacts from upcoming changes to the de minimis exemption, which currently allows duty-free U.S. imports for shipments under $800. This concern echoes Alphabet’s recent warning about potential headwinds to its online ad business in the Asia-Pacific region.

Cost Management and User Growth

Snap reduced its full-year adjusted operating expenses projection to between $2.65 billion and $2.70 billion, down from the previous $2.70-$2.75 billion range. Stock-based compensation guidance similarly decreased to $1.13-$1.16 billion.

Monthly active users grew to 900 million, up from 850 million reported in August. The Snapchat+ subscription service reached 15 million subscribers, generating $152 million in “other revenue” – a 75% year-over-year increase.

North American daily active users declined slightly to 99 million from 100 million in the previous quarter, although the company does not anticipate further reductions in the current period.