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    GOOGL   US02079K3059

ALPHABET INC.

(GOOGL)
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Snap shares plunge 25% as Apple privacy changes hit ads business

10/21/2021 | 04:15pm EST

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 advertising.

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 said.

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 318 million. (Reporting by Sheila Dang in Dallas; Editing by Bernard Orr and Chris Reese)


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
ALPHABET INC. -0.67% 2840.03 Delayed Quote.63.14%
APPLE INC. -1.17% 161.84 Delayed Quote.24.18%
FACEBOOK INC -1.14% 306.84 Delayed Quote.13.63%
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Financials (USD)
Sales 2021 254 B - -
Net income 2021 73 048 M - -
Net cash 2021 143 B - -
P/E ratio 2021 26,3x
Yield 2021 -
Capitalization 1 888 B 1 888 B -
EV / Sales 2021 6,87x
EV / Sales 2022 5,77x
Nbr of Employees 150 028
Free-Float 93,1%
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Mean consensus BUY
Number of Analysts 48
Last Close Price 2 840,03 $
Average target price 3 351,59 $
Spread / Average Target 18,0%
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Managers and Directors
Sundar Pichai Chief Executive Officer & Director
Ruth M. Porat Chief Financial Officer & Senior Vice President
John LeRoy Hennessy Chairman
John L Doerr Independent Director
Ann Mather Independent Director
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