Snap Inc. said it expects its revenue growth to slow in the fourth quarter due to recent changes to Apple iPhone privacy rules.
Shares of the company dropped 23% to $57.90 a share in after-hours trading Thursday after the announcement. Earlier in the day, the stock closed at $75.11 a share Thursday on the New York Stock Exchange.
The Santa Monica, California-based company said revenue rose 57% to $1.07 billion for the quarter ended Sept. 30, slightly below Wall Street expectations and its own guidance, according to The Wall Street Journal. It shrunk its net loss for the quarter to $72 million from $199.9 million a year ago.
Snap (NYSE: SNAP) also projected revenue for the quarter ending Dec. 31 would reach $1.17 billion to $1.21 billion, up from $911 million in the year-earlier period but below the average Factset analyst forecast of $1.36 billion.
Snap said Apple’s new privacy rules have caused advertisers to cut back on spending more than it had expected.
“While we anticipated some degree of business disruption, the new Apple-provided measurement solution did not scale as we had expected, making it more difficult for our ad partners to measure and manage their ad campaigns for iOS,” Snap CEO Evan Spiegel said in a statement, according to CNBC.
The company also warned that global supply-chain and labor shortages have reduced the “short-term appetite to generate additional customer demand through advertising.”
“Unfortunately, these changes are occurring during a season when our advertising partners would normally expect their supply chains to be operating at peak capacity, and at a time when we would otherwise expect peak advertising demand to drive peak contestation, and therefore peak pricing, in our auction,” CFO Derek Andersen said, according to CNBC.
Snap said it has 306 million daily active users, up more than 4% from April and nearly 23% higher than a year ago. The company expects to attract 316 million to 318 million daily active users in the fourth quarter.
