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 and Twitter,
which release third quarter results next week.
Snap's results also knocked Facebook shares down 6 percent,
Twitter down 7 percent and Alphabet fell 3 percent 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 September 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 percent 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 cent 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. © Reuters
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