Oct 21 (Reuters) - Shares of Snap Inc plummeted 25%
on Thursday after the owner of photo messaging app Snapchat said
privacy changes implemented by Apple Inc on iOS devices
hurt the company's ability to target and measure its digital
The Santa Monica, California-based company, which earns the
vast majority of its revenue from selling digital advertising on
the app, said the issue was compounded by global supply chain
disruptions and labor shortages and caused brands to pull back
on their advertising spending.
The results for Snap, which is the first of the major social
media companies to report earnings, cast a shadow over Facebook
Inc and Twitter Inc, which release third quarter
results next week.
Snap's results also knocked Facebook shares down 6%, Twitter
down 7% and Alphabet fell 3% on Thursday.
The Apple privacy updates were rolled out broadly in June
and prevent digital advertisers from tracking iPhone users
without their consent.
A new ad measurement tool provided by Apple hampered the
ability for companies to measure the performance of their ads,
upending many of the ways advertisers have been accustomed to
doing business for decades, said Snap Chief Executive Evan
Spiegel during a conference call with analysts.
"This has definitely been a frustrating setback for us," he
Snap added it expects the Apple privacy changes and global
supply chain disruptions to linger through the fourth quarter,
which is typically the highest-earning period for social media
companies when brands ramp up marketing for the holiday season.
Many of the advertisers who place ads on Snapchat are in the
beauty, fashion and consumer goods industries.
Snap said the supply chain disruptions affected a wide
variety of advertisers across industries and regions.
Revenue for the third quarter ended Sept. 30 was $1.07
billion, missing consensus estimates of $1.1 billion, according
to IBES data from Refinitiv.
Daily active users, a metric watched closely by advertisers
and investors, rose 23% year-over-year to 306 million, beating
analyst estimates of 301.9 million.
Snapchat has worked to attract and retain users by building
new features like the ability to discover restaurants and stores
through a map feature, or play virtual games with friends.
The net loss during the quarter was $72 million, or 5 cents
per share, narrowing from $199.9 million, or 14 cents per share,
in the year-ago quarter.
Snap forecast fourth quarter revenue between $1.16 billion
to $1.2 billion, and daily active users between 316 million to
(Reporting by Sheila Dang in Dallas; Editing by Bernard Orr and