(Bloomberg) – Snap Inc. nearly beat analyst estimates of first-quarter revenue but refused to release sales forecasts in the current period, saying it was browsing the macroeconomic “headwind” for its advertising business.
While its revenue continued to grow in the second quarter, Snap said economic volatility “could affect advertising demand more broadly”, which helped its decision to withhold sales forecasts. Stocks fell more than 7% in expansion trading.
“We believe it is prudent to continue to balance our investment levels with the realized revenue growth,” Snap wrote in a letter to shareholders.
Revenue for the quarter ended March 31 was $1.36 billion, it said in a statement Tuesday, slightly higher than the average analyst average of Bloomberg compiled.
The company also expanded its adjusted operating expenses full-year target to $2.65 billion to $2.7 billion, down $50 million at the midpoint of the range. It also reduces the scope of expected stock compensation.
The total number of advertisers in the quarter grew by 60% in the same period a year ago, directly responding to ads (promotions focus on inducing users to do something, such as visiting a website or buying a product), accounting for 75% of SNAP’s advertising revenue this quarter, the highest in history. The company has been working hard to emphasize hosting such ads, which makes it easier to successfully attribute it to Snap.
The company’s subscription product, Snapchat, now has 15 million paid subscribers, a 59% increase from the previous year. Overall, the company has 900 million active users per month, closer to its 1 billion target.
SNAP is one of many companies warning of the difficulties of doing business with Donald Trump’s ongoing trade war, during which the government imposed extensive tariffs on goods from nearly all of the U.S.’s largest trading partners. Porsche AG warned that profit margins have narrowed and rolled its shares. JetBlue Airways Corp. put its full-year outlook into its full-year outlook on Tuesday, and General Motors Co. also withdrew its earnings guidance.
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