Apple broke Snap stock: the company's shares fell by 20% after the report

Apple сломала акции Snap: бумаги компании упали на 20% после отчета

Snap, Snapchat video chat developer, published a report for the third quarter. Here are the main results compared to last year.:

  • revenue increased by 57%, up to $ 1,067 million;
  • operating loss increased from 167 to 181 million;
  • net loss decreased from 200 to 72 million.

Snapchat is a messaging service and video. We analyzed the company's business in detail in a separate review..

In the third quarter, the number of daily active Snapchat users grew by 23%, up to 306 million people. This is more than 302 million, which analysts have been waiting for. But sales turned out to be about 30 million less than expected. Revenue per user too - 3,49 vs 3,67 $. And all because of Apple's new policy, believe in the company. After the report, Snap shares fell by 20%, to 60 $.

Apple released a new version of the iOS operating system in April 14.5. Users were allowed to hide the device's advertising ID from third-party apps. So internet services like Facebook and Google it has become more difficult to track user preferences. This reduced the relevance of the ad., and with it the advertising revenues of companies.

Even in winter, before the update is released, Snap CEO Evan Spiegel spoke positively about Apple's initiative: "We feel, well prepared for change. Honestly, these changes are in line with our privacy philosophy. It's good for consumers, even if it hurts advertisers a little in the future. ".

Now the company says, that the new privacy settings affected ad revenue more, than expected. Snap forecasts fourth-quarter revenues of $ 1.16-1.2 billion. Analysts expected 1.36 billion, according to consensus.

Snap executives noted, that supply disruptions and labor shortages also reduced partners' willingness to ramp up ad spending.

Against the background of such results, promotions of other services, who earn on advertising, also fell hard: Facebook и Twitter — на 5%, Pinterest — на 4%, Alphabet — на 2%.

Over the past year, excluding the recent fall, Snap shares are up by 170%. Despite a capitalization of $ 118 billion, Snap is still unprofitable. Usually, the shares of such companies are volatile and react to any slowdown in revenue growth.. And Apple's privacy policy could affect Snap more, than the rest: Unlike Facebook and Twitter, the company has never reported a profit to shareholders.

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