by Sloan T. Wilson, The Chicago Times
October 21, 2021
NEW YORK — Snap Inc. shares fell more than 25% in extended trading Thursday after the social media company reported mediocre revenue and blamed Apple Inc. and supply-chain constraints.
The creator of the photo messaging app Snapchat said Apple imposed privacy changes on iOS devices harmed Snap’s ability to target and measure digital advertising. According to Snap, global supply chain disruptions and labor shortages have caused companies to reduce their advertising spending.
Snap reported a net loss of $71.9 million or 5 cents per share, down from a loss of $199.8 million, or 14 cents per share, a year ago. Snap reported adjusted earnings per share of 17 cents.
Snap’s revenue increased by 57% to $1.07 billion, the company’s first billion-dollar quarter, but it fell short of Wall Street expectations of $1.1 billion.
Snap said it expects the Apple privacy changes and global supply chain disruptions to linger through the fourth quarter. Executives issued fourth-quarter revenue guidance of $1.17 billion to $1.21 billion, significantly short of the $1.36 billion projected on average by analysts polled on FactSet.
The stock’s freefall on Thursday erased recent gains; Snap shares are up 50% this year, while the broader S&P 500 is up 21% in 2021. According to Wall Street analysts, Snap had 306 million daily active users in the third quarter, edging out the average analyst forecast of 301.8 million.
Snap announced the launch of Arcadia, a global creative studio on Tuesday to assist brands in developing augmented reality advertising and experiences. The studio, which has already partnered with Verizon Communications Inc., Shake Shack Inc., and World Wrestling Entertainment Inc. will collaborate with brands and creators to engage Snapchat’s millennial and Generation Z audiences.