(Bloomberg) -- Snap Inc. reported fourth-quarter revenue and user growth that topped projections, bolstered by the Snapchat mobile app’s newest advertising tools and rising popularity outside the U.S. The company said it expects some unpredictability in 2021, sending shares lower in late trading.

Sales rose 62 per cent to US$911 million, exceeding the US$856.1 million average estimate of analysts, according to data compiled by Bloomberg. In a statement Thursday, the Santa Monica, California-based social media company said it reached 265 million daily active users, compared with a 257.9 million average prediction.

Still, in prepared remarks, Snap executives outlined some challenges that put its momentum at risk in the short term. The violent riots at the U.S. Capitol caused some advertisers to pause spending temporarily, for instance, and Snap said it can’t yet estimate the potential impact of new Apple Inc. privacy rules for its advertising business.

Snapchat has been benefiting from an improved Android version of its app, plus efforts to add content and features in local languages to its media section, leading to more downloads in overseas markets. The company has also refined its ad-targeting capabilities and launched unique tools like augmented reality try-on for products, so people can test out makeup shades virtually on their faces, for example. That contributed to a doubling of active advertisers compared with a year earlier, especially as businesses sought to offer alternatives to in-person shopping.

“The pandemic and stay-at-home orders accelerated a digital transformation, creating a new normal where brands are trying to determine the technology and trends that are here to stay,” Jeremi Gorman, Snap’s chief business officer, said in prepared remarks.

The company’s quarterly net loss narrowed to US$113.1 million, or 8 cents a share, from US$240.7 million, or 17 cents, a year earlier. Excluding some items, profit was 9 cents a share, compared to the 7-cent average analyst estimate. The shares, which closed at US$58.31 in New York, declined about 6 per cent in extended trading. The stock had more than tripled in the past year.

Even though it cautioned on possible challenges, Snap forecast first-quarter revenue of US$720 million to US$740 million, higher than the US$705.2 million analysts projected. The company expects to reach 275 million daily active users in the current period. Snap also said revenue growth is expected to accelerate in 2021 from last year’s 46 per cent rate.