Social media company Snap drops 22% after third quarter revenue hit due to Apple privacy changes and supply chain disruption

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Snapchat

Snapchat’s parent company Snap fell 22% in pre-market exchanges on Friday after the social media company said changes to Apple’s privacy tracking settings affected its third-party results. quarter and cited the global supply chain crisis and labor shortage as negative factors going forward.

Snap was last at $ 58.97 per share in pre-market trading, marking a 21.5% decline from its last official close. Its shares closed down 0.71% during normal hours Thursday, before releasing its results.

The company reported third-quarter revenue of more than $ 1 billion, but reported a net loss of $ 72 million, according to its earnings report. Snap chief executive Evan Spiegel said the company missed the lower end of its $ 3 million forecast in profit call Thursday. He cited two factors that weighed on his bottom line.

“We missed the lower end of our $ 3 million forecast due to a few key factors, including changes in ad tracking on iOS and macroeconomic factors that impacted our ad partners,†said Spiegel said.

Changes were made to Apple’s iOS ad tracking that rolled out widely in June and July, Spiegel said. Apple started requiring all of its apps to first get permission from its users to be tracked for ads, but device users only allowed this 25% of the time, according to at Bloomberg.

“While we anticipated some degree of business disruption, Apple’s new solution provided a measurement solution not to scale as we expected, making it more difficult for our advertising partners to measure and manage their advertising campaigns for iOS, â€continued Spiegel.

The impact of the pandemic on the global supply chain and labor supply has affected Snap’s ability to generate additional customer demand, Spiegel said.

“At a time when their businesses are already constrained in terms of supply, the scale and duration of these global supply and labor disruptions are inherently unpredictable, and in the meantime we are focused on supporting our partners. in this uncertain environment, â€said Spiegel.

Snap’s bullish outlook has affected other tech companies. Google’s parent company Alphabet fell 2% while Facebook fell 4% in pre-market trading.

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